[Title 27 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2001 Edition]
[From the U.S. Government Printing Office]



[[Page i]]
          

                    27


          Part 200 to End

                         Revised as of April 1, 2001

Alcohol, Tobacco Products and Firearms





          Containing a codification of documents of general 
          applicability and future effect
          As of April 1, 2001
          With Ancillaries
          Published by
          Office of the Federal Register
          National Archives and Records
          Administration

A Special Edition of the Federal Register

[[Page ii]]

                                    




                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2001



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[[Page iii]]



                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 27:
          Chapter I--Bureau of Alcohol, Tobacco and Firearms, 
          Department of the Treasury--Continued                      3
  Finding Aids:
      Material Approved for Incorporation by Reference........     301
      Table of CFR Titles and Chapters........................     303
      Alphabetical List of Agencies Appearing in the CFR......     321
      List of CFR Sections Affected...........................     331

[[Page iv]]

      


                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus,  27 CFR 200.1 refers 
                       to title 27, part 200, 
                       section 1.

                     ----------------------------

[[Page v]]

                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, April 1, 2001), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request. 

[[Page vi]]

Many agencies have begun publishing numerous OMB 
control numbers as amendments to existing regulations in the CFR. These 
OMB numbers are placed as close as possible to the applicable 
recordkeeping or reporting requirements.



OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Properly approved incorporations by reference in this volume are 
listed in the Finding Aids at the end of this volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
containing that incorporation. If, after contacting the agency, you find 
the material is not available, please notify the Director of the Federal 
Register, National Archives and Records Administration, Washington DC 
20408, or call (202) 523-4534.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

[[Page vii]]

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
[email protected].

SALES

    The Government Printing Office (GPO) processes all sales and 
distribution of the CFR. For payment by credit card, call 202-512-1800, 
M-F, 8 a.m. to 4 p.m. e.s.t. or fax your order to 202-512-2250, 24 hours 
a day. For payment by check, write to the Superintendent of Documents, 
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Customer Service call 202-512-1803.

ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers, Weekly Compilation of Presidential 
Documents and the Privacy Act Compilation are available in electronic 
format at www.access.gpo.gov/nara (``GPO Access''). For more 
information, contact Electronic Information Dissemination Services, U.S. 
Government Printing Office. Phone 202-512-1530, or 888-293-6498 (toll-
free). E-mail, [email protected].


    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.nara.gov/fedreg. The NARA 
site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

April 1, 2001.

[[Page ix]]

                               THIS TITLE

    Title 27--Alcohol, Tobacco Products, and Firearms is composed of two 
volumes, parts 1-199 and part 200 to end. The contents of these volumes 
represent all current regulations issued by the Bureau of Alcohol, 
Tobacco and Firearms, Department of the Treasury as of April 1, 2001.

    A redesignation table appears in the Finding Aids section of the 
volume containing parts 1-199.

[[Page x]]





[[Page 1]]



            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS




                  (This book contains part 200 to End)

  --------------------------------------------------------------------
                                                                    Part

chapter I--Bureau of Alcohol, Tobacco and Firearms, 
  Department of the Treasury--Continued.....................         200

[[Page 3]]



 CHAPTER I--BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, DEPARTMENT OF THE 
                           TREASURY--Continued




  --------------------------------------------------------------------


  Editorial Note: The regulations appearing in this title were 
originally issued by the Federal Alcohol Administration which was 
abolished by Reorganization Plan No. III, Apr. 2, 1940, 5 FR 2107, 3 
CFR, 1940 Supp. Treasury Order 30, June 12, 1940, 5 FR 2212, issued 
under sections 2 and 8 of Reorganization Plan No. III (54 Stat. 1232) 
provided that these regulations continue in effect as regulations of the 
Bureau of Alcohol, Tobacco and Firearms.

    SUBCHAPTER M--ALCOHOL, TOBACCO AND OTHER EXCISE TAXES--CONTINUED
Part                                                                Page
200             Rules of practice in permit proceedings.....           5
250             Liquors and articles from Puerto Rico and 
                    the Virgin Islands......................          23
251             Importation of distilled spirits, wines, and 
                    beer....................................          76
252             Exportation of liquors......................          93
270             Manufacture of tobacco products and 
                    cigarette papers and tubes..............         140
275             Importation of tobacco products and 
                    cigarette papers and tubes..............         197
285             [Reserved]

290             Exportation of tobacco products and 
                    cigarette papers and tubes, without 
                    payment of tax, or with drawback of tax.         231
295             Removal of tobacco products and cigarette 
                    papers and tubes, without payment of tax 
                    for use of the United States............         271
296             Miscellaneous regulations relating to 
                    tobacco products and cigarette papers 
                    and tubes...............................         278

Supplementary Publications: Additional supplementary publications are 
  issued covering individual parts of the Alcohol, Tobacco and Firearms 
  Regulations, the Tobacco Tax Guide, and Regulations Under Tax 
  Conventions.

Cross References: U.S. Customs Service, Department of the Treasury: See 
  19 CFR chapter I.

  Federal Trade Commission: See 16 CFR chapter I.

  Food and Drug Administration, Department of Health and Human Services: 
See 21 CFR chapter I.

[[Page 4]]


  Foreign Trade Statistics, Bureau of the Census, Department of 
Commerce: See 15 CFR part 30.

  Postal Service: See 39 CFR 111.5(a)(2)(iii) or Domestic Mail Manual 
123.3.

  Other regulations issued by the Department of the Treasury appear in 
title 26 and 31 CFR chapter I.


Abbreviations:
    The following abbreviations are used in this chapter:
    ATF = Alcohol, Tobacco and Firearms.
    TD = Treasury Decision.

[[Page 5]]





    SUBCHAPTER M--ALCOHOL, TOBACCO AND OTHER EXCISE TAXES--Continued




PART 200--RULES OF PRACTICE IN PERMIT PROCEEDINGS--Table of Contents




            Subpart A--Scope and Construction of Regulations

Sec.
200.1  Scope of part.
200.2  Liberal construction.
200.3  Forms prescribed.

                         Subpart B--Definitions

200.5  Meaning of terms.

                           Subpart C--General

200.25  Communications and pleadings.
200.26  Service on applicant or respondent.
200.27  Service on the director of industry operations or Director.

                                  Time

200.28  Computation.
200.29  Continuances and extensions.

                       Representation at Hearings

200.30  Personal representation.
200.31  Attorneys and other representatives.

                  Subpart D--Compliance and Settlement

200.35  Opportunity for compliance.

                           Informal Settlement

200.36  General.
200.37  Notice of contemplated action.
200.38  Limitation on informal settlement.

                     Subpart E--Grounds for Citation

200.45  Basic permits.
200.46  Tobacco permits.
200.48  Operating permits and industrial use permits.
200.49  Applications for basic permits.
200.49a  Applications for operating permits and industrial use permits.
200.49b  Applications for tobacco permits.

                      Subpart F--Hearing Procedure

                                Citations

200.55  Content.
200.56  Form.
200.57  Execution and disposition.
200.58  Designated place of hearing.

                           Request for Hearing

200.59  Application cases.
200.60  Suspension, revocation, or annulment proceedings.
200.61  Notice of hearing.

                         Non-Request for Hearing

200.62  Application.
200.63  Suspension, revocation, or annulment proceedings.

                                 Answers

200.64  When required.
200.65  Answer admitting facts.
200.66  Prehearing conferences.

                            Failure to Appear

200.67  Applications.
200.68  [Reserved]
200.69  Suspension, revocation, or annulment.

                            Waiver of Hearing

200.70  Application proceedings.
200.71  Adjudication based upon written submissions.

                           Surrender of Permit

200.72  Before citation.
200.73  After citation.

                                 Motions

200.74  General.
200.75  Prior to hearing.
200.76  At hearing.

                                 Hearing

200.77  General.
200.78  Applications.
200.79  Suspension, revocation, or annulment.

                             Burden of Proof

200.80  Applications.
200.81  Suspension, revocation, or annulment.

                                 General

200.82  Stipulations at hearing.
200.83  Evidence.
200.84  Closing of hearings; arguments, briefs and proposed findings.
200.85  Reopening of the hearing.

                           Record of Testimony

200.86  Stenographic record.
200.87  Oath of reporter.

[[Page 6]]

                  Subpart G--Administrative Law Judges

200.95  Responsibilities of administrative law judges.
200.96  Disqualification.
200.97  Powers.
200.98  Separation of functions.
200.99  Conduct of hearing.
200.100  Unavailability of administrative law judge.

                          Subpart H--Decisions

200.105  Administrative law judge's finding and decision or recommended 
          decision.
200.106  Certification and transmittal of record and decision.

                Action by Director of Industry Operations

200.107  Application proceedings.
200.107a  Director of Industry Operations' decision.
200.108  Suspension, revocation, or annulment proceedings.
200.109  Notice to Director.
200.110  Proceedings involving violations not within region of issuance 
          of permit.

                            Subpart I--Review

200.115  Appeal on petition to the Director.
200.116  Review by Director.
200.117  Permit privileges, exceptions.
200.118  Court review.
200.119  [Reserved]

                        Subpart J--Miscellaneous

200.125  Depositions.
200.126  Subpoenas.
200.127  Witnesses and fees.

                                 Record

200.128  What constitutes record.
200.129  Availability.

    Authority: 26 U.S.C. 7805, 27 U.S.C. 204.

    Source: 21 FR 1441, Mar. 6, 1956, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.

    Editorial Note: Nomenclature changes to part 200 appear at T.D. ATF-
414, 64 FR 49084, Sept. 10, 1999.



            Subpart A--Scope and Construction of Regulations



Sec. 200.1  Scope of part.

    The regulations in this part govern the procedure and practice in 
connection with the disapproval of applications for basic permits, and 
for the suspension, revocation and annulment of such permits under 
sections 3 and 4 of the Federal Alcohol Administration Act (27 U.S.C. 
201 et seq.) and disapproval, suspension, and revocation of permits 
under title 26 of the U.S. Code. The regulations in this part shall also 
govern, insofar as applicable, any adversary proceeding involving 
adjudication required by statute to be determined on the record after 
opportunity for hearing, under laws administered by the Bureau of 
Alcohol, Tobacco and Firearms.

[21 FR 1441, Mar. 6, 1956, as amended by T.D. 6389, 24 FR 4790, June 12, 
1959. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting Sec. 200.1, 
see the List of CFR Sections Affected in the Finding Aids section of 
this volume.



Sec. 200.2  Liberal construction.

    The regulations in this part shall be liberally contrued to secure 
just, expeditious, and efficient determination of the issues presented. 
The Rules of Civil Procedure for the U.S. District Courts (28 U.S.C. 
appendix), where applicable, shall be a guide in any situation not 
provided for or controlled by this part but shall be liberally construed 
or relaxed when necessary.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46917, Sept. 23, 1981]



Sec. 200.3  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46918, Sept. 23, 1981, as amended by T.D. ATF-372, 
61 FR 20725, May 8, 1996]

[[Page 7]]



                         Subpart B--Definitions



Sec. 200.5  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
subpart. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``include'' and ``including'' do not exclude things 
not enumerated which are in the same general class.
    Administrative law judge. The person appointed pursuant to 5 U.S.C. 
3105, designated to preside over any administrative proceedings under 
this part.
    Applicant. Any person who has filed an initial application for a 
permit under the Federal Alcohol Administration Act or the Internal 
Revenue Code (26 U.S.C.).
    Application. Any application for a permit under the Federal Alcohol 
Administration Act or the Internal Revenue Code (26 U.S.C.) for 
operations not covered by an existing permit.
    Attorney for the Government. The attorney in the appropriate office 
of Chief Counsel authorized to represent the Director of Industry 
Operations in the proceeding.
    CFR. The Code of Federal Regulations.
    Citation. Includes any notice contemplating the disapproval of an 
application or any order to show cause why a permit should not be 
suspended, revoked or annulled.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, D.C.
    Director of Industry Operations. The principal ATF official in a 
field operations division responsible for administering the regulations 
in this part.
    Initial decision. The decision of the Director of Industry 
Operations or administrative law judge in a proceeding on the 
suspension, revocation or annulment of a permit.
    Other term. Any other term defined in the Federal Alcohol 
Administration Act (27 U.S.C. 201), the Internal Revenue Code (26 
U.S.C.) or the Administrative Procedure Act (5 U.S.C. 1001), where used 
in this part, shall have the meaning assigned to it therein.
    Permit--(a) Alcohol fuel permit. The document issued under 26 U.S.C. 
5181, authorizing the person named therein to engage in the business 
described therein.
    (b) Basic permit. The document authorizing the person named therein 
to engage in a designated business or activity under the Federal Alcohol 
Administration Act.
    (c) Industrial use permit. The document issued under 26 U.S.C. 
5271(a), authorizing the person named therein to withdraw and use 
distilled spirits free of tax in accordance with part 22 of this 
chapter, or withdraw and deal in or use specially denatured spirits in 
accordance with part 20 of this chapter, as described therein.
    (d) Operating permit. The document issued under 26 U.S.C. 5171, 
authorizing the person named therein to engage in the business described 
therein.
    (e) Tobacco permit. The document issued under 26 U.S.C. 5713(a), 
authorizing the person named therein to engage in the business described 
therein.
    Permittee. Any person holding a basic permit under the Federal 
Alcohol Administration Act or the Internal Revenue Code (26 U.S.C.).
    Person. An individual, trust, estate, partnership, association, 
company, or corporation.
    Recommended decision. The advisory decision of the administrative 
law judge in any proceeding on an initial application for a permit.
    Respondent. Any person holding a permit against which an order has 
been issued to show cause why such permit should not be suspended, 
revoked or annulled.

[T.D. ATF-48, 43 FR 13543, Mar. 31, 1978; 44 FR 55845, Sept. 28, 1978, 
and amended by T.D. ATF-62, 44 FR 71696, Dec. 11, 1979; T.D. ATF-199, 50 
FR 9196, Mar. 6, 1985; T.D ATF-244, 51 FR 45762, Dec. 22, 1986; T.D. 
ATF-374, 61 FR 29956, June 13, 1996; T.D. ATF-414, 64 FR 49084, Sept. 
10, 1999]

[[Page 8]]



                           Subpart C--General



Sec. 200.25  Communications and pleadings.

    All communications to the Government regarding the procedures set 
forth in this part and all pleadings, such as answers, motions, 
requests, or other papers or documents required or permitted to be filed 
under this part, relating to a proceeding pending before an 
administrative law judge, shall be addressed to the administrative law 
judge, at his post of duty or to the administrative law judge, in care 
of the director of industry operations of the region in which the 
business of the applicant or respondent is operated or proposed to be 
operated to be forwarded to the examiner. Communications concerning 
proceedings not pending before an administrative law judge, should be 
addressed to the Director of Industry Operations (DIO) or Director, as 
the case may be. All pleadings should be filed in quadruplicate.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 200.26  Service on applicant or respondent.

    All orders, notices, citations, motions and other formal documents, 
except subpoenas, required to be served under the regulations in this 
part may be served by mailing a signed duplicate original copy thereof 
to the permittee or applicant by registered mail, with request for 
return receipt card, at the address stated in his permit or application 
or at his last known address, or by delivery of such original copy to 
the permittee or applicant personally, or in the case of a corporation, 
partnership, or other unincorporated association, by delivering the same 
to an officer, or manager, or general agent thereof, or to its attorney 
of record. Such personal service may be made by any employee of the 
Bureau of Alcohol Tobacco and Firearms or by any employee of the 
Treasury Department designated by the Secretary. A certificate of 
mailing and the return receipt card, or certificate of service signed by 
the person making such service, shall be filed as a part of the record.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979]



Sec. 200.27  Service on the director of industry operations or Director.

    Pleadings, motions, notices, and other formal documents, except 
subpoenas, may be served, by registered mail or personally, on the 
director of industry operations (or upon the attorney for the Government 
on behalf of the director of industry operations, or on the Director, if 
the proceeding is before him for review on appeal.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]

                                  Time



Sec. 200.28  Computation.

    In computing any period of time prescribed or allowed by this part, 
the day of the act, event or default after which the designated period 
of time is to run, is not to be included. The last day of the period to 
be computed is to be included, unless it be a Saturday, Sunday or legal 
holiday, in which event the period runs until the next day which is 
neither a Saturday, Sunday or legal holiday. Pleading, requests, or 
other papers or documents required or permitted to be filed under this 
part must be received for filing at the appropriate office within the 
time limits, if any, for such filing.



Sec. 200.29  Continuances and extensions.

    For good cause shown, the administrative law judge, Director, 
director of industry operations, or the administrative law judge, as the 
case may be, may grant continuances and as to all matters pending before 
him extend any time limit prescribed by the regulations in this part 
(except where the time limit is statutory).

(26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as 
amended), 18 U.S.C. 926 (82 Stat. 959), and Sec. 38, Arms Export Control 
Act (22 U.S.C. 2778, 90 Stat. 744))

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; T.D. ATF-374, 61 
FR 29957, June 13, 1996]

[[Page 9]]

                       Representation at Hearings



Sec. 200.30  Personal representation.

    Any individual or member of a partnership may after adequate 
identification, appear for himself, or such partnership, and a 
corporation or association may be represented by a bona fide officer of 
such corporation or association, upon showing of adequate authorization.



Sec. 200.31  Attorneys and other representatives.

    A respondent or applicant may be represented by an attorney, 
certified public accountant, or other person enrolled to practice before 
the Bureau of Alcohol, Tobacco and Firearms under 31 CFR part 8--
Practice Before the Bureau of Alcohol, Tobacco and Firearms. The 
representative shall file in the proceeding a duly executed power of 
attorney to represent the applicant or respondent. See 26 CFR 601.501 
through 601.527 (conference and practice requirements). The director of 
industry operations shall be represented in proceedings under this part 
by the attorney for the Government who is authorize to execute and file 
motions, briefs, and other papers in the proceeding, on behalf of the 
director of industry operations, in his own name as ``Attorney for the 
Government''.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-48, 44 FR 55846, Sept. 28, 1979, as amended by T.D. ATF-92, 46 
FR 46918, Sept. 23, 1981; T.D. ATF-374, 61 FR 29957, June 13, 1996]



                  Subpart D--Compliance and Settlement



Sec. 200.35  Opportunity for compliance.

    Except in proceedings involving willfulness or those in which the 
public interest requires otherwise, and the director of industry 
operations so alleges in his citation, stating his reasons therefor, no 
permit shall be suspended, revoked or annulled, unless, prior to the 
institution of proceedings, facts or conduct warranting such action 
shall have been called to the attention of the permittee by the director 
of industry operations, in writing, and the permittee shall have been 
accorded an opportunity to demonstrate or achieve compliance with all 
lawful requirements, as set forth in section 9(b) of the Administrative 
Procedure Act. If the permittee fails to meet the requirements of the 
law and regulations within such reasonable time as may be specified by 
the director of industry operations, proceedings for suspension, 
revocation or annulment of the permit shall be initiated.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9196, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]

                           Informal Settlement



Sec. 200.36  General.

    In all proceedings in which a permittee is cited to show cause why 
the permit should not be suspended, revoked or annulled, the permittee 
shall be afforded opportunity for the submission and consideration of 
facts, arguments, offers of settlement, or proposals of adjustment, 
where time, the nature of the proceeding, and the public interest 
permit. Such submittals should be made to the director of industry 
operations, but may be made through the attorney for the Government. 
Where necessary, the date of the hearing may be postponed, pending 
consideration of such proposals, when they are made in good faith and 
not for the purpose of delay. If proposals of settlement are submitted, 
and they are considered unsatisfactory, the director of industry 
operations may reject the proposals and may, either directly or through 
the attorney for the Government, inform the permittee of any conditions 
on which the alleged violations may be settled. If the proposals of 
settlement are considered satisfactory to the director of industry 
operations, the permittee shall be notified thereof and the proceeding 
shall be dismissed, unless such proposals of settlement include a 
monetary offer in compromise considered satisfactory to the director of 
industry operations, in which event the proceeding shall be held in 
abeyance pending final action on such monetary offer in compromise.

[T.D. ATF-244, 51 FR 45762, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

[[Page 10]]



Sec. 200.37  Notice of contemplated action.

    Where the director of industry operations believes that the matter 
may be settled informally, i.e., without formal administrative 
proceedings, he shall, in accordance with section 5 (b) of the 
Administrative Procedure Act, prior to the issuance of a citation, 
inform the permittee of the contemplated issuance of an order to show 
cause why his permit should not be suspended, revoked or annulled, and 
that he is being given an opportunity for the submission and 
consideration of facts, arguments, offers of settlement, or proposals of 
adjustment. The notice should inform the permittee of the charges on 
which the citation would be based, if issued, and afford him a period of 
10 days from the date of the notice, or such longer period as the 
director of industry operations deems necessary, in which to submit 
proposals of settlement to the director of industry operations. Where 
informal settlement is not reached promptly because of inaction of the 
permittee or proposals are made for the purpose of delay, a citation 
shall be issued in accordance with Secs. 200.55 and 200.56.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9196, Mar. 6, 1985; T.D. ATF-244, 51 
FR 45763, Dec. 22, 1986; T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 200.38  Limitation on informal settlement.

    Where the evidence is conclusive and the nature of the violation is 
such as to preclude any settlement short of suspension, revocation or 
annulment, or the violation is of a continuing character that 
necessitates immediate action to protect the public interest, or where 
the director of industry operations believes that any informal 
settlement of the alleged violation will not insure future compliance 
with the laws and regulations, or in any similar case where the 
circumstances are such as to clearly preclude informal settlement, and 
the director of industry operations so finds and states his reasons 
therefor as provided in Sec. 200.35, he may restrict settlement to that 
provided in Sec. 200.71.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



                     Subpart E--Grounds for Citation



Sec. 200.45  Basic permits.

    Whenever the director of industry operations has reason to believe 
that any person has willfully violated any of the conditions of his 
basic permit, or has not in fact or in good faith engaged in the 
operations authorized by such permit for a period of more than two 
years, or that such permit was procured through fraud, misrepresentation 
or concealment of material facts, he shall issue a citation for the 
suspension, revocation or annulment of such permit, as the case may be.

[21 FR 1441, Mar. 6, 1956, as amended by T.D. 6389, 24 FR 4790, June 12, 
1959. Redesignated at 40 FR 16835, Apr. 15, 1975, as amended by T.D. 
ATF-374, 61 FR 29957, June 13, 1996]



Sec. 200.46  Tobacco permits.

    Whenever the director of industry operations has reason to believe 
that any person has not in good faith complied with any of the 
provisions of 26 U.S.C. chapter 52 or regulations issued thereunder, or 
has not complied with any provision of 26 U.S.C. which involves intent 
to defraud, or has violated any of the conditions of his permit, or has 
failed to disclose any material information required, or has made any 
materially false statement, in the application for his permit, or has 
failed to maintain his premises in such manner as to protect the 
revenue, the director of industry operations shall issue a citation for 
the revocation or suspension of such permit.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 200.48  Operating permits and industrial use permits.

    Whenever the director of industry operations has reason to believe 
that any person who has an operating permit or an industrial use permit:

[[Page 11]]

    (a) Has not in good faith complied with the provisions of 26 U.S.C. 
chapter 51 or enabling regulations; or
    (b) Has violated the conditions of such permit; or
    (c) Has made any false statement as to any material fact in his 
application therefor; or
    (d) Has failed to disclose any material information required to be 
furnished; or
    (e) Has violated or conspired to violate any law of the United 
States relating to intoxicating liquor or has been convicted of any 
offense under 26 U.S.C. punishable as a felony or of any conspiracy to 
commit such an offense; or
    (f) Is (in the case of any person who has a permit to procure or use 
distilled spirits free of tax for nonbeverage purposes and not for 
resale or use in the manufacture of any product for sale, or to procure, 
deal in, or use specially denatured distilled spirits) by reason of his 
operations, no longer warranted in procuring or using the distilled 
spirits or specially denatured distilled spirits authorized by his 
permit; or
    (g) Has, in the case of any person who has a permit to procure, deal 
in, or use specially denatured distilled spirits, manufactured articles 
which do not correspond to the descriptions and limitation prescribed by 
law and regulations; or
    (h) Has not engaged in any of the operations authorized by the 
permit for a period of more than 2 years;


He may issue a citation for the revocation or suspension of such permit.

(72 Stat. 1349, 1370; 26 U.S.C. 5171, 5271)

[T.D. 6389, 24 FR 4790, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. 
ATF-199, 50 FR 9196 and 9197, Mar. 6, 1985; T.D. ATF-374, 61 FR 29957, 
June 13, 1996]



Sec. 200.49  Applications for basic permits.

    If, upon examination of any application (including a renewal 
application) for a basic permit, the director of industry operations has 
reason to believe that the applicant is not entitled to such permit he 
shall issue a citation for the contemplated disapproval of the 
application.

[T.D. 6954, 33 FR 6814, May 4, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975; as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 200.49a  Applications for operating permits and industrial use permits.

    If, on examination of an application for an operating permit or an 
industrial use permit, the director of industry operations has reason to 
believe:
    (a) In case of an application to withdraw and use distilled spirits 
free of tax, the applicant is not authorized by law or regulations 
issued pursuant thereto to withdraw or use such distilled spirits; or
    (b) The applicant (including in the case of a corporation, any 
officer, director, or principal stockholder and, in the case of a 
partnership, a partner) is, by reason of the applicant's business 
experience, financial standing, or trade connections, not likely to 
maintain operations in compliance with 26 U.S.C. chapter 51 or 
implementing regulations; or
    (c) The applicant has failed to disclose any material information 
required, or has made any false statement as to any material fact, in 
connection with his application; or
    (d) The premises on which the applicant proposes to conduct the 
business are not adequate to protect the revenue;


He may issue a citation for the contemplated disapproval of the 
application.

(72 Stat. 1349, 1370; 26 U.S.C. 5171, 5271)

[T.D. 6389, 24 FR 4791, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. 
ATF-199, 50 FR 9196 and 9197, Mar. 6, 1985; T.D. ATF-374, 61 FR 29957, 
June 13, 1996]



Sec. 200.49b  Applications for tobacco permits.

    If, on examination of an application for a tobacco permit provided 
for in 26 U.S.C. 5713, the director of industry operations has reason to 
believe--
    (a) The premises on which it is proposed to conduct the business are 
not adequate to protect the revenue; or

[[Page 12]]

    (b) The applicant for a permit does not meet the minimum 
manufacturing and activity requirements in 27 CFR 270.61; or
    (c) The applicant (including, in the case of a corporation, any 
officer, director, or principal stockholder and, in the case of a 
partnership, a partner) is, by reason of his business experience, 
financial standing, or trade connections, not likely to maintain 
operations in compliance with 26 U.S.C. chapter 52, or has failed to 
disclose any material information required or made any material false 
statement in the application; the director of industry operations may 
issue a citation for the contemplated disapproval of the application.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6389, 24 FR 4791, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. 
ATF-374, 61 FR 29957, June 13, 1996; T.D. ATF-421, 64 FR 71923, Dec. 22, 
1999]



                      Subpart F--Hearing Procedure

                                Citations



Sec. 200.55  Content.

    (a) Citation for the suspension, revocation or annulment of a permit 
shall be issued by the director of industry operations and shall set 
forth (1) the sections of law and regulations relied upon for authority 
and jurisdiction, (2) in separate paragraphs, the matters of fact 
constituting the violations specified, dates, places, section of law and 
regulations violated, and (3) the permittee has 15 days within which to 
request a hearing before an administrative law judge.
    (b) Citations for the disapproval of an application for a permit 
shall set forth (1) the sections of law and regulations relied upon for 
authority and jurisdiction, (2) in separate paragraphs, the matters of 
fact and law relied upon for the contemplated disapproval of the 
application, and (3) that the application will be disapproved unless a 
hearing is requested within 15 days.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 200.56  Form.

    Citations shall be issued on the following forms:
    (a) Form 5000.6. ``Order To Show Cause'', shall be used for all 
citations for the suspension, revocation, or annulment, as the case may 
be, of permits under the Internal Revenue Code or the Federal Alcohol 
Administration Act.
    (b) Forms 5000.17. ``Notice of Contemplated Disapproval of 
Application For Basic Permit,'' shall be used to issue notice of 
contemplated disapproval of applications for permit.

[21 FR 1441, Mar. 6, 1956, as amended by T.D. 6389, 24 FR 4791, June 12, 
1959. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. 
ATF-199, 50 FR 9197, Mar. 6, 1985]

    Editorial Note: For Federal Register citations affecting 
Sec. 200.56, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 200.57  Execution and disposition.

    Forms 5000.6 and 5000.17 shall be executed in quintuplicate. A 
signed duplicated original shall be served on the permittee. If a 
hearing is requested, one copy shall be sent to the administrative law 
judge designated to conduct the hearing. The original copy containing 
the certificate of service shall be placed in the official record of the 
proceeding; and the remaining copies shall be retained for the office of 
the director of industry operations.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 200.58  Designated place of hearing.

    The designated place of hearing shall be such as meets the 
convenience and necessity of the parties.

[T.D. 6389, 24 FR 4791, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975]

                           Request for Hearing



Sec. 200.59  Application cases.

    If the applicant for a permit desires a hearing, he shall file a 
request therefor, in writing, with the director of industry operations 
within fifteen days

[[Page 13]]

after receipt of notice of the contemplated disapproval, in whole or in 
part, of his application.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 200.60  Suspension, revocation, or annulment proceedings.

    (a) If a hearing is desired, the respondent shall file a request, in 
writing, with the director of industry operations within 15 days after 
receipt of the citation or within such time as the director of industry 
operations may allow.
    (b) Where a respondent requests a hearing, the director of industry 
operations shall forward a copy of the request together with a copy of 
the citation to the Director for the assignment of an administrative law 
judge.
    (c) After the Director notifies the director of industry operations 
of the assignment of the administrative law judge, the director of 
industry operations shall serve a notice of designation of the 
administrative law judge on the respondent.
    (d) The administrative law judge shall set a time and place for a 
hearing and shall serve notice thereof on the parties at least 10 days 
in advance of the hearing date.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 200.61  Notice of hearing.

    In case a request for a hearing is filed by the applicant within the 
required time, the director of industry operations shall refer the 
matter to the administrative law judge and the administrative law judge 
shall set a time and place for a hearing and shall serve notice thereof 
upon the parties at least ten days in advance of the hearing date.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]

                         Non-Request for Hearing



Sec. 200.62  Application.

    In the case of an application, if the applicant does not request a 
hearing within the time specified in Sec. 200.59, or within such further 
time as the director of industry operations may in his discretion allow, 
the director of industry operations will by order, stating the findings 
upon which it is based, disapprove the application, and will serve 
signed duplicate original of such order on the applicant.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 200.63  Suspension, revocation, or annulment proceedings.

    If the respondent does not request a hearing within the time 
specified in Sec. 200.60, and does not file an answer as required in 
Sec. 200.64, the district director shall make the initial decision in 
the case in accordance with Sec. 200.79.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

                                 Answers



Sec. 200.64  When required.

    (a) Where the respondent requests a hearing in accordance with 
Sec. 200.60, a written answer shall be filed with the administrative law 
judge and served on the director of industry operations within 15 days 
after service of the designation of the administrative law judge.
    (b) Where no hearing is requested, the respondent shall file a 
written answer with the director of industry operations within 15 days 
after service of a citation.
    (c) An answer shall contain a concise statement of the facts that 
constitute his grounds for defense. The hearing may be limited to the 
issues contained in the citation and the answer. The administrative law 
judge, or director of industry operations as the case may be, may, as a 
matter of discretion, waive any requirement of this section.
    (d) Answers need not be filed in application proceedings.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

[[Page 14]]



Sec. 200.65  Answer admitting facts.

    If the respondent desires to waive the hearing on the allegations of 
fact set forth in the order to show cause, and does not contest the 
facts, the answer may consist of a statement that the respondent admits 
all material allegations of fact charged in the citation to be true. The 
director of industry operations shall thereupon base the decision on the 
citation and such answer although such an answer shall not affect the 
respondent's right to submit proposed findings of fact and conclusions 
of law, or the right to appeal.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 200.66  Prehearing conferences.

    In any proceeding the administrative law judge may, upon his own 
motion or upon the motion of one of the parties or their qualified 
representatives, in his discretion direct the parties or their qualified 
representatives to appear at a specified time and place for a conference 
to consider:
    (a) The simplifications of the issues;
    (b) The necessity of amendments to the pleadings;
    (c) The possibility of obtaining stipulations, admissions of facts 
and of documents;
    (d) The limitation of the number of expert witnesses; and
    (e) Such other matters as may aid in the disposition of the 
proceeding. As soon as practicable after such conference, the 
administrative law judge shall issue an order which recites the action 
taken thereat, the amendments allowed to the pleadings and the 
agreements made by the parties or their qualified representatives as to 
any of the matters considered, and which limits the issues for hearing 
to those not disposed of by admission or agreement; and such order shall 
control the subsequent course of the proceedings, unless modified for 
good cause by a subsequent order.

                            Failure To Appear



Sec. 200.67  Applications.

    Where the applicant on an application for a permit has requested a 
hearing and does not appear at the appointed time and place, and 
evidence has not been offered to refute or explain the grounds upon 
which disapproval of the application is contemplated, this shall be 
construed as a waiver of the hearing, a default will be entered and the 
administrative law judge shall recommend disapproval of said 
application.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985]



Sec. 200.68  [Reserved]



Sec. 200.69  Suspension, revocation, or annulment.

    If on the date set for the hearing respondent does not appear and no 
evidence has been offered, the attorney for the Government will proceed 
ex parte and offer for the record sufficient evidence to make a prima 
facie case. At such hearing, documents, statements and affidavits may be 
submitted in lieu of testimony of witnesses.

                            Waiver of Hearing



Sec. 200.70  Application proceedings.

    At any time prior to final action thereon the applicant may, by 
filing written notice with the director of industry operations, withdraw 
his application. If such a notice is filed after referral to the 
administrative law judge of a proceeding on an application for a permit 
and prior to issuance of his recommended decision or decision thereon, 
the director of industry operations shall move the administrative law 
judge to dismiss the proceedings as moot. If such a notice is filed 
while the proceeding is before the director of industry operations and 
prior to final action thereon, that is, either (a) after issuance of a 
notice of contemplated disapproval and before referral of the proceeding 
to the administrative law

[[Page 15]]

judge or (b) after issuance by the administrative law judge of his 
recommended decision and prior to the director of industry operations' 
order disapproving the application, the director of industry operations 
shall, by order, dismiss the proceeding.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 200.71  Adjudication based upon written submissions.

    The respondent may waive the hearing before the administrative law 
judge, and stipulate that the matter will be adjudicated by the director 
of industry operations based upon written submissions. Written 
submissions may include stipulations of law or facts, proposed findings 
of fact and conclusions of law, briefs, or any other documentary 
material. The pleadings together with the written submissions of both 
the attorneys for the Government and the respondent shall constitute the 
record on which the initial decision shall be based. The election to 
contest the citation without a hearing under this section does not 
affect the respondent's right to appeal.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

                           Surrender of Permit



Sec. 200.72  Before citation.

    If a respondent surrenders the permit before citation, the director 
of industry operations may accept the surrender. But if the evidence, in 
the opinion of the director of industry operations, warrants citation 
for suspension, revocation or annulment, the surrender shall be refused 
and the director of industry operations shall issue the citation.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 200.73  After citation.

    If a respondent surrenders the permit after citation and prior to an 
initial decision, the director of industry operations may accept the 
surrender of the permit and dismiss the proceeding as moot. If, however, 
in the opinion of the director of industry operations, the evidence is 
such as to warrant suspension, revocation or annulment, as the case may 
be, the surrender of the permit shall be refused, and the proceeding 
shall continue.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

                                 Motions



Sec. 200.74  General.

    All motions shall be made and addressed to the officer before whom 
the proceeding is pending, and copies of all motion papers shall be 
served upon the other party or parties. Such officer may dispose of any 
motion without oral argument, but he may, if he so desires, set it down 
for hearing and request argument. He may dispose of such motion prior to 
the hearing on the merits or he may postpone the disposition until the 
hearing on the merits. No appeal may be taken from any ruling on a 
motion until the whole record is certified for review. Examples of 
typical motions may be found in the Rules of Civil Procedure referred to 
in Sec. 200.2.



Sec. 200.75  Prior to hearing.

    All motions which should be made prior to the hearing, such as 
motion directed to the sufficiency of the pleadings or of preliminary 
orders, shall be filed in writing with the director of industry 
operations issuing the citation or the administrative law judge if the 
matter has been referred to him, and shall briefly state the order or 
relief applied for and the grounds for such motion, and shall be filed 
within 15 days after service of the citation.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 200.76  At hearing.

    Motions at the hearing may be made in writing to the administrative 
law judge or stated orally on the record.

[[Page 16]]

                                 Hearing



Sec. 200.77  General.

    If a hearing is requested, it shall be held at the time and place 
stated in the notice of hearing unless otherwise ordered by the 
administrative law judge.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986]



Sec. 200.78  Applications.

    The administrative law judge who presides at the hearing on 
applications shall recommend a decision to the director of industry 
operations who shall make the initial decision as provided in 
Sec. 200.107. The applicant may be directed by the director of industry 
operations to produce such records as may be deemed necessary for 
examination. All hearings on applications shall be open to the public 
subject to such restrictions and limitations as may be consistent with 
orderly procedure.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 200.79  Suspension, revocation, or annulment.

    (a) The administrative law judge who presides at the hearing in 
proceedings for the suspension, revocation and annulment of permits 
shall make the initial decision.
    (b) If no hearing is requested, the director of industry operations 
shall make the initial decision.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

                             Burden of Proof



Sec. 200.80  Applications.

    In hearings on the contemplated disapproval of applications there 
may be incorporated in the record sufficient testimony, reports, 
affidavits and other documents to be considered only for the limited 
purpose of establishing probable cause for the issuance of the notice of 
contemplated disapproval by showing that the director of industry 
operations had reason to believe that the applicant is not entitled to a 
permit. The burden of proof shall be upon the applicant to produce 
evidence to show he is entitled to a permit. The director of industry 
operations may, instead of following the aforementioned procedure, 
assume the burden of going forward.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 200.81  Suspension, revocation, or annulment.

    In hearings on the suspension, revocation, or annulment of a permit, 
the burden of proof is on the Government.

[T.D. ATF-199, 50 FR 9197, Mar. 6, 1985]

                                 General



Sec. 200.82  Stipulations at hearing.

    If there has been no prehearing conference under Sec. 200.66, the 
administrative law judge shall at the beginning of the hearing, require 
that the parties attempt to arrive at such stipulations as will 
eliminate the necessity of taking evidence with respect to allegations 
of fact concerning which there is no substantial dispute. The 
administrative law judge should take similar action, where it appears 
appropriate, throughout the hearing and should call and conduct any 
conferences which he deems advisable with a view to the simplification, 
clarification, and disposition of any of the issues involved.



Sec. 200.83  Evidence.

    Any evidence which would be admissible under the rules of evidence 
governing proceedings in matters not involving trial by jury in the 
Courts of the United States, shall be admissible and controlling as far 
as possible: Provided, That the administrative law judge may relax such 
rules in any hearing when in his judgment such relaxation would not 
impair the rights of either party and would more speedily conclude the 
hearing, or would better serve the ends of justice. Except as provided 
in Sec. 200.81, the proponent of an order shall have the burden of 
proof. Every party shall have the right to present his case or defense 
by oral or documentary evidence, depositions, duly authenticated copies 
of records and documents, to submit rebuttal evidence, and to conduct 
such reasonable

[[Page 17]]

cross-examination as may be required for a full and true disclosure of 
the facts. The administrative law judge shall have the right in his 
discretion to limit the number of witnesses whose testimony may be 
merely cumulative and shall, as a matter of policy, not only exclude 
irrelevant, immaterial, or unduly repetitious evidence but shall also 
limit the cross-examination of witnesses to reasonable bounds so as not 
to unnecessarily prolong the hearing and unduly burden the record. 
Material and relevant evidence shall not be excluded, because it is not 
the best evidence, unless its authenticity is challenged, in which case 
reasonable time shall be given to establish its authenticity. When 
portions only of a document are to be relied upon, the offering party 
shall prepare the pertinent excerpts, adequately identified, and shall 
supply copies of such excerpts, together with a statement indicating the 
purpose for which such materials will be offered, to the administrative 
law judge and to the other parties. Only the excerpts, so prepared and 
submitted, shall be received in the record. However, the whole of the 
original document should be made available for examination and for use 
by opposing counsel for purposes of cross-examination. Compilations, 
charts, summaries of data and photostatic copies of documents may be 
admitted in evidence if the proceedings will thereby be expedited, and 
if the material upon which they are based is available for examination 
by the parties. Objections to the evidence shall be in short form, 
stating the grounds relied upon. The transcript shall not include 
argument or debate on objections, except as ordered by the 
administrative law judge, but shall include the rulings thereon.



Sec. 200.84  Closing of hearings; arguments, briefs and proposed findings.

    Before closing a hearing, the administrative law judge shall inquire 
of each party whether he has any further evidence to offer, which 
inquiry and the response thereto shall be shown in the record. The 
administrative law judge may hear arguments of counsel and may limit the 
time of such arguments at his discretion, and may, in his discretion, 
allow briefs to be filed on behalf of either party but shall closely 
limit the time within which the briefs for both parties shall be filed, 
so as to avoid unreasonable delay. The administrative law judge shall 
also ascertain whether the parties desire to submit proposed findings 
and conclusions, together with supporting reasons, and if so a period of 
not more than 15 days (unless extended by the administrative law 
judge)--after the close of the hearing or receipt of a copy of the 
record, if one is requested--will be allowed for such purpose.



Sec. 200.85  Reopening of the hearing.

    The Director, the director of industry operations or the 
administrative law judge, as the case may be, may, as to all matters 
pending before him, in his discretion reopen the hearing (a) in case of 
default where applicant failed to request a hearing or to appear after 
one was set, upon petition setting forth reasonable grounds for such 
failure, and (b) in case any party desires leave to adduce additional 
evidence upon petition summarizing such evidence, establishing its 
materiality and stating reasonable grounds why such party with due 
diligence was unable to produce such evidence at the hearing.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979; T.D. ATF-374, 61 FR 29957, June 13, 1996]

                           Record of Testimony



Sec. 200.86  Stenographic record.

    A stenographic record shall be made of the testimony and 
proceedings, including stipulations and admissions of fact (but not 
arguments of counsel unless otherwise ordered by the administrative law 
judge) in all proceedings. A transcript of the evidence and proceedings 
at the hearing shall be made in all cases.



Sec. 200.87  Oath of reporter.

    The reporter making the stenographic record shall subscribe an oath 
before the administrative law judge, to be filed in the record of the 
case, that he will truly and correctly report the oral testimony and 
proceedings at such

[[Page 18]]

hearing and accurately transcribe the same to the best of his ability.



                  Subpart G--Administrative Law Judges



Sec. 200.95  Responsibilities of administrative law judges.

    Administrative law judges shall be under the administrative control 
of the Director. They shall be responsible for the conduct of hearings 
and shall render their decisions as soon as is reasonably possible after 
the hearing is closed. Administrative law judges shall also be 
responsible for the preparation, certification and forwarding of reports 
of hearings, and the administrative work relating thereto, and, by 
arrangement with directors of industry operations and representatives of 
the Chief Counsel, shall have access to facilities and temporary use of 
personnel at such times and places as are needed in the prompt dispatch 
of official business.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979; T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 200.96  Disqualification.

    An administrative law judge shall, at any time, withdraw from any 
proceeding if he deems himself disqualified; and upon the filing in good 
faith by the applicant or respondent, or by the attorney for the 
Government, of a timely and sufficient affidavit of facts showing 
personal bias or otherwise warranting the disqualification of any 
administrative law judge, the Director shall upon appeal as provided in 
Sec. 200.115, if the administrative law judge fails to disqualify 
himself, determine the matter as a part of the record and decision in 
the proceeding. If he decides the administrative law judge should have 
declared himself disqualified, he will remand the record for hearing de 
novo before another administrative law judge. If the Director should 
decide against the disqualification of the administrative law judge, the 
proceeding will be reviewed on its merits.



Sec. 200.97  Powers.

    Administrative law judges shall have authority to (a) administer 
oaths and affirmations; (b) issue subpoenas authorized by law; (c) rule 
upon offers of proof and receive relevant evidence; (d) take or cause 
depositions to be taken whenever the ends of justice would be served 
thereby; (e) regulate the course of the hearing; (f) hold conferences 
for the settlement or simplification of the issues by consent of the 
parties; (g) dispose of procedural requests or similar matters; (h) 
render recommended decisions in proceedings on applications for permits, 
and in suspension, revocation, or annulment proceedings against permits; 
(i) call, examine and cross-examine witnesses, including hostile or 
adverse witnesses when he deems such action to be necessary to a just 
disposition of the cause, and introduce into the record documentary or 
other evidence; and (j) take any other action authorized by rule of the 
Bureau of Alcohol, Tobacco and Firearms consistent with the 
Administrative Procedure Act.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. ATF-119, 
50 FR 9197, Mar. 6, 1985]



Sec. 200.98  Separation of functions.

    Administrative law judges shall perform no duties inconsistent with 
their duties and responsibilities as such. Administrative law judges may 
be assigned duties not inconsistent with the performance of their 
functions as administrative law judges. Save to the extent required for 
the disposition of ex parte matters as required by law, no 
administrative law judge shall consult any person or party as to any 
fact in issue unless upon notice and opportunity for all parties to 
participate. The functions of the administrative law judge shall be 
entirely separated from the general investigative functions of the 
agency. No officer, employee, or agent engaged in the performance of 
investigative or prosecuting functions in any proceeding shall, in that 
or a factually related proceeding, participate or advise in the 
administrative law judge's or Director's decision, or in the agency 
review

[[Page 19]]

on appeal, except as a witness or counsel in the proceedings. The 
administrative law judge may not informally obtain advice or opinions 
from the parties or their counsel, or from any officer or employee of 
the Bureau of Alcohol, Tobacco and Firearms, as to the facts or the 
weight or interpretation to be given to the evidence. He may, however, 
informally obtain advice on matters of law from officers or employees 
who were not engaged in the performance of investigative or prosecuting 
functions in that or a factually related proceeding. This limitation 
does not apply to the Director, and the administrative law judge may, at 
any time, consult with and obtain instructions from him on questions of 
law and policy.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979]



Sec. 200.99  Conduct of hearing.

    The administrative law judge is charged with the duty of conducting 
a fair and impartial hearing and of maintaining order in form and manner 
consistent with dignity. In the event that counsel or any person or 
witness in any proceeding shall refuse to obey the orders of the 
administrative law judge, or be guilty of disorderly or contemptuous 
language or conduct in connection with any hearing, the administrative 
law judge may, for good cause stated in the record, suspend the hearing, 
and, in the case of an attorney, recommend that the Director report the 
matter to the Director of Practice for disciplinary action. The refusal 
of a witness to answer any question which has been ruled to be proper 
shall be considered by the administrative law judge in determining the 
weight to be given all the testimony of that witness.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979]



Sec. 200.100  Unavailability of administrative law judge.

    In the event that the administrative law judge designated to conduct 
a hearing becomes unavailable before the filing of his findings and 
decision or recommended decision, the Director may assign the case to 
another administrative law judge for the continuance of the proceeding, 
in accordance with the regulations in this part in the same manner as if 
he had been designated administrative law judge at the commencement of 
the proceeding.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979]



                          Subpart H--Decisions



Sec. 200.105  Administrative law judge's finding and decision or recommended decision.

    Within a reasonable time after the conclusion of the hearing, and as 
expeditiously as possible, the administrative law judge shall render his 
decision or recommended decision, as the case may be. All decisions 
shall become a part of the record and, if proposed findings and 
conclusions have been filed, shall show the administrative law judge's 
ruling upon each of such proposed findings and conclusions. Decisions 
shall consist of (a) a brief statement of the issues of fact involved in 
the proceeding; (b) the administrative law judge's findings and 
conclusions, as well as the reasons or basis therefor with record 
references, upon all the material issues of fact, law or discretion 
presented on the record (including, when appropriate, comment as to the 
credibility and demeanor of the witnesses); and (c) the administrative 
law judge's determination or recommended determination on the record. 
Where the administrative law judge determines that the imposition of a 
period of suspension of the permit is appropriate, his decision shall 
state the length of such period of suspension, to commence at such time 
as the director of industry operations shall specify.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975. 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 200.106  Certification and transmittal of record and decision.

    After reaching his decision, the administrative law judge shall 
certify to the complete record of the proceeding before him and (a) in 
proceedings on an

[[Page 20]]

application, shall immediately forward the complete certified record 
together with four copies of his recommended decision to the director of 
industry operations for initial decision, or (b) in revocation, 
suspension or annulment proceedings, shall immediately forward the 
complete certified record, together with two copies of his decision, to 
the regional director (compliance), serve one copy of his decision on 
the respondent or his counsel and transmit a copy of his decision to the 
attorney for the Government.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]

                Action by Director of Industry Operations



Sec. 200.107  Application proceedings.

    If, upon receipt of the record and the recommended decision of the 
administrative law judge, the director of industry operations decides 
that the permit should be issued, he shall thereupon approve the 
application briefly stating, for the record, his reasons therefor, but 
if he contemplates the disapproval of the application he shall serve a 
copy of the administrative law judge's recommended decision on the 
applicant, informing the applicant of his contemplated action and 
affording the applicant not more than 10 days in which to submit 
proposed findings and conclusions or exceptions to the recommended 
decision with reasons in support thereof. If the director of industry 
operations, after consideration of the record of the hearing and of any 
proposed findings, conclusions or exceptions filed with him by the 
applicant, approves the findings, conclusions and recommended decision 
of the administrative law judge, he shall by order approve or disapprove 
of the application in accordance therewith. If, after such 
consideration, he disapproves of the findings, conclusions and 
recommended decision of the administrative law judge, in whole or in 
part, he shall by order make such findings and conclusions as in his 
opinion are warranted by the law and facts in the record. Any decision 
of the director of industry operations ordering the disapproval of an 
application for a permit shall state the findings and conclusions upon 
which it is based, including his ruling upon each proposed finding, 
conclusion and exception to the administrative law judge's recommended 
decision, together with a statement of his findings and conclusions, and 
reasons or basis therefor, upon all material issues of fact, law or 
discretion presented on the record. A signed duplicate original of the 
decision shall be served upon the applicant and the original copy 
containing certificate of service shall be placed in the official record 
of the proceeding.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 200.107a  Director of Industry Operations' decision.

    (a) When the director of industry operations issues an initial 
decision in accordance with Sec. 200.79, the decision shall become a 
part of the record. The decision shall consist of
    (1) A brief statement of the issues involved in the proceedings;
    (2) The director of industry operations' findings and conclusions, 
as well as the reasons therefor; and
    (3) The director of industry operations' determination on the 
record.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 200.108  Suspension, revocation, or annulment proceedings.

    (a) Upon receipt of the complete certified record of the hearing the 
director of industry operations shall enter an order suspending, 
revoking, or annulling the permit (Form 1430-B) or dismissing the 
proceedings in accordance with the administrative law judge's findings 
and decision, unless he disagrees with such findings and decision and 
files a petition with the Director, for review thereof, as provided in 
Sec. 200.115. If the director of industry operations files such 
petition, he shall withhold issuance of the order, pending the decision 
of the Director, upon receipt of which he shall issue the order

[[Page 21]]

in accordance therewith. A signed duplicate original of the order of the 
director of industry operations shall be served upon the respondent and 
the original copy containing certificate of service shall be placed in 
the official record of the proceeding. In all proceedings in which a 
suspension is imposed, the director of industry operations' order shall 
state the time when the suspension period set forth in the 
administrative law judge's decision shall commence and terminate.
    (b) In a case where the initial decision is made by the director of 
industry operations in accordance with Sec. 200.79, the director of 
industry operations will also issue an order suspending, revoking or 
annulling the permit (on Form 5000.5), or dismissing the proceedings in 
accordance with his initial decision. A signed duplicated original of 
the decision and order of the director of industry operations shall be 
served upon the respondent and the original copy placed in the official 
record of the proceeding. In all proceedings in which a suspension is 
imposed, the director of industry operations' order shall state the time 
when the suspension period set forth in the initial decision shall 
commence and terminate.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9196 and 9197, Mar. 6, 1985; T.D. 
ATF-244, 51 FR 45764, Dec. 22, 1986; T.D. ATF-374, 61 FR 29957, June 13, 
1996]



Sec. 200.109  Notice to Director.

    When the director of industry operations makes an order suspending, 
revoking or annulling a permit, he will furnish a copy of the order and 
of the decision on which it is based to the Director. Should such order 
be subsequently set aside on review by the courts, the director of 
industry operations will so advise the Director.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 200.110  Proceedings involving violations not within region of issuance of permit.

    In the event violations occurred at a place not within the region of 
issuance of a permit, the director of industry operations of the region 
of issuance will take jurisdiction over any proceeding including issuing 
the citation, and taking appropriate action in accordance with 
Sec. 200.108.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



                            Subpart I--Review



Sec. 200.115  Appeal on petition to the Director.

    An appeal to the Director is required prior to application to the 
Federal courts for review. An appeal may be taken by the applicant or 
respondent or by the director of industry operations. Such appeal shall 
be taken by filing a petition for review on appeal with the Director 
within 15 days of the service of the order disapproving an application 
for a permit or the initial decision suspending, revoking or annulling a 
permit. The petition must set forth facts tending to show action of an 
arbitrary nature, or action without reasonable warrant in fact, or 
action contrary to law and regulations. A copy of the petition shall be 
filed with the director of industry operations or served on the 
respondent or applicant as the case may be. In the event of such appeal, 
the director of industry operations shall immediately certify and 
forward the complete original record, by certified mail, to the 
Director, for his consideration and review.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 200.116  Review by Director.

    The Director, on appeal on petition for review, shall afford a 
reasonable opportunity for the submission of proposed findings, 
conclusions or exceptions with reasons in support thereof and an 
opportunity for oral argument. He may alter or modify any finding of the 
administrative law judge (or of the director of industry operations in 
application proceedings) and may affirm, reverse, or modify the decision 
of the administrative law judge (or of the director of industry 
operations in initial application proceedings), or he may remand the 
case for further hearing, but

[[Page 22]]

he shall not consider evidence which is not a part of the record. 
Appeals and petitions for review shall not be decided by the Director in 
any proceeding in which he has engaged in investigation or prosecution, 
and in such event he shall so state his disqualification in writing and 
refer the record to the Under Secretary for appropriate action. The 
Under Secretary may designate an Assistant Secretary or one of his 
principal aides to consider any proceeding instead of the Director. The 
original copy of the decision on review shall be placed in the official 
record of the proceeding, a signed duplicate original shall be served 
upon the applicant or respondent and a copy shall be transmitted to the 
director of industry operations. When, on appeal, the Director affirms 
the decision of the director of industry operations or the 
administrative law judge, as the case may be, disapproving an 
application or suspending, revoking or annulling a permit, such action 
shall not supersede the decision of the director of industry operations 
or the administrative law judge and such decision shall be final.

(26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as 
amended), 18 U.S.C. 926 (82 Stat. 959), and Sec. 38, Arms Export Control 
Act (22 U.S.C. 2778, 90 Stat. 744))

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; T.D. ATF-199, 50 
FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 200.117  Permit privileges, exceptions.

    Pending final determination of any timely appeal in revocation, 
suspension, or annulment proceeding to the Director, the permit involved 
shall continue in force and effect except that, in the case of 
industrial use permits, any time after a citation has been issued 
withdrawals of tax-free spirits or specially denatured spirits by such 
permittee may, in the discretion of the director of industry operations 
or Director, be restricted to the quantity which, together with the 
quantity then on hand, is necessary to carry on legitimate operations 
under such permit. The director of industry operations may, in 
restricting the permittee to his legitimate needs, refuse to issue any 
withdrawal permit.

[T.D. 6389, 24 FR 4791, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 FR 
29957, June 13, 1996]



Sec. 200.118  Court review.

    If an applicant or respondent files an appeal in Federal court of 
the Director's decision, the Director, upon notification that an appeal 
has been taken, shall prepare the record for submission to the court in 
accordance with the applicable court rules.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986]



Sec. 200.119  [Reserved]



                        Subpart J--Miscellaneous



Sec. 200.125  Depositions.

    The administrative law judge may take or order the taking of 
depositions by either party to the proceeding at such time and place as 
he may designate before a person having the power to administer oaths, 
upon application therefor and notice to the parties to the action. The 
testimony shall be reduced to writing by the person taking the 
deposition, or under his direction, and the deposition shall be 
subscribed by the deponent unless subscribing thereof is waived in 
writing by the parties. Any person may be subpoenaed to appear and 
depose and to produce documentary evidence in the same manner as 
witnesses at hearings.



Sec. 200.126  Subpoenas.

    On written application by a party to a proceeding, the attendance 
and testimony of any person, or the production of documentary evidence 
in proceedings instituted under this part may be required by personal 
subpoena (Form 5600.10) or by subpoena duces tecum (Form 5600.11). 
Application should be addressed to, and subpoenas should be issued by, 
the administrative law judge before whom the proceedings are pending, 
but may be issued by the director of industry operations or by the 
Director, if the administrative law judge is unavailable. Both the 
application and the subpoena shall set forth the title of the 
proceedings, the name

[[Page 23]]

and address of the person whose attendance is required, the date and 
place of his attendance and, if documents are to be produced, a 
description thereof; and the application must have reasonable scope and 
specify as exactly as possible the documents required, if any, and show 
their general relevance. Subpoenas shall be served in person. When 
issued on behalf of the United States, service shall be made by an 
officer, employee, or agent of the Treasury Department; when issued on 
behalf of a permittee or applicant, service shall be made by any person 
who is not a party to the proceeding and is not less than 18 years of 
age.

(49 Stat. 977, 72 Stat. 1372; 27 U.S.C. 202, 26 U.S.C. 5274)

[21 FR 1441, Mar. 6, 1956, as amended by T.D. 6389, 24 FR 4791, June 12, 
1959. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. 
ATF-244, 51 FR 45764, Dec. 22, 1986; T.D. ATF-374, 61 FR 29957, June 13, 
1996]



Sec. 200.127  Witnesses and fees.

    Witnesses summoned before the administrative law judge may be paid 
the same fees and mileage that are paid witnesses in the courts of the 
United States, and witnesses whose depositions are taken and the persons 
taking the same shall severally be entitled to the same fees as are paid 
for like services in the courts of the United States. Witness fees and 
mileage shall be paid by the party at whose instance the witnesses 
appear and the person taking the deposition shall be paid by the party 
at whose instance the deposition is taken.

                                 Record



Sec. 200.128  What constitutes record.

    The transcript of testimony, pleadings and exhibits, all papers and 
requests filed in the proceeding, together with all findings, decisions 
and orders, shall constitute the exclusive record. Where the decision 
rests on official notice of material fact not appearing in the record, 
the administrative law judge shall so state in his findings and any 
party shall, on timely request, be afforded an opportunity to show facts 
to the contrary.



Sec. 200.129  Availability.

    A copy of the record shall be available for inspection by the 
parties to the proceedings during business hours at the office of the 
administrative law judge or the director of industry operations or, 
pending administrative review, at the office of the Director. Copies of 
the record desired by the respondent or applicant may be purchased from 
the contract reporter or may be obtained in accordance with part 71 of 
this chapter.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-92, 46 FR 46918, Sept. 23, 1981; T.D. ATF-374, 
61 FR 29957, June 13, 1996]



PART 250--LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN ISLANDS--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
250.1  Alcoholic products coming into the United States from Puerto Rico 
          and the Virgin Islands.
250.2  Forms prescribed.

                         Subpart B--Definitions

250.11  Meaning of terms.

Subpart C [Reserved]

 Subpart Ca--Rum Imported Into the United States From Areas Other Than 
                   Puerto Rico and the Virgin Islands

250.30  Excise taxes.
250.31  Formula.

   Subpart Cb--Products Coming into the United States From Puerto Rico

250.35  Taxable status.
250.36  Products exempt from tax.
250.36a-250.36b  [Reserved]
250.36c  Shipments of bulk distilled spirits to the United States 
          without payment of tax.
250.37  United States Bureau of Alcohol, Tobacco and Firearms office.
250.38  Containers of distilled spirits.
250.39  Labels.
250.40  Marking containers of distilled spirits.
250.41  Destruction of marks and brands.
250.43  Samples.

[[Page 24]]

                      Special (Occupational) Taxes

250.44  Liquor dealer's special taxes.
250.45  Warehouse receipts covering distilled spirits.
250.46  Distilled spirits plant proprietor's special (occupational) tax.
250.47  Specially denatured spirits user's and dealer's special 
          (occupational) taxes.

            Subpart D--Formulas for Products From Puerto Rico

250.50  Formulas for liquors.
250.50a  Verfication of eligible flavors.
250.51  Formulas for articles, eligible articles, and products 
          manufactured with denatured spirits.
250.52  Still wines containing carbon dioxide.
250.53  Changes of formulas.
250.54  Filing and disposition of formulas.
250.55  Previously approved formulas.

      Subpart E--Taxpayment of Liquors and Articles in Puerto Rico

                                  Bonds

250.61  General.
250.62  Corporate surety.
250.62a  Filing of powers of attorney.
250.62b  Execution of powers of attorney.
250.63  Deposit of securities in lieu of corporate surety.
250.64  Consents of surety.
250.65  Authority to approve bonds and consents of surety.
250.66  Bond, ATF Form 5110.50--Distilled spirits.
250.67  Bond, Form 2897--Wine.
250.68  Bond, Form 2898--Beer.
250.68a  Bond account.
250.69  Strengthening bonds.
250.70  New or superseding bonds.
250.70a  Notice of approval of bonds.

                          Termination of Bonds

250.71  Termination of bonds.
250.72  Application of surety for relief from bond.
250.73  Relief of surety from bond.
250.74  Release of pledged securities.
250.75  Form 1490, Notice of Termination of Bond.

                            Permits Required

250.76  Insular permits.

                            Distilled Spirits

250.77  Subject to tax.
250.78  Application and permit, ATF Form 5110.51.
250.79  Inspection or gauge and computation of tax.
250.79a  Computation of effective tax rate.
250.80  Deferred payment of tax--release of spirits.
250.81  Prepayment of tax and release of spirits.
250.82  Permit to ship.

                      Packages of Distilled Spirits

250.86  Authority for shipment.
250.87  Evidence of taxpayment.

                                  Wine

250.92  Subject to tax.
250.93  Application and permit, Form 2900.
250.94  Computation of tax.
250.95  Deferred payment of tax--release of wine.
250.96  Prepayment of tax--release of wine.
250.96a  [Reserved]
250.96b  Permit to ship.
250.97  Marking containers of wine.

                                  Beer

250.101  Subject to tax.
250.102  Application and permit, Form 2900.
250.103  Computation of tax.
250.104  Deferred payment of tax--release of beer.
250.105  Prepayment of tax--release of beer.
250.105a  Permit to ship.
250.106  Marking containers of beer.

                                Articles

250.107  Taxable status.
250.108  Application for permit, ATF Form 5110.51 and/or Form 2900.
250.109  Taxpayment.
250.110  Release of articles or liquors.

                        Payment of Tax by Return

250.111  General.
250.112  Returns for semimonthly periods.
250.112a  Payment of tax by electronic fund transfer.
250.113  Returns for prepayment of taxes.

                   Permit To Ship Liquors and Articles

250.114  Permit to ship required.
250.115  Application, Form 487B.
250.116  Issuance of permit, Form 487B, and customs inspection.

                      Procedure at Port of Arrival

250.117  Action by carrier.
250.118  Inspection by district director of customs at port of arrival.
250.119  Disposition of forms by district director of customs.

  Subpart F--Liquors and Articles Purchased by Tourists in Puerto Rico

250.125  Taxable.
250.126  Taxpayment in Puerto Rico.
250.128  Taxpayment at port of arrival.

[[Page 25]]

       Subpart G--Closures for Distilled Spirits From Puerto Rico

250.135  Containers of distilled spirits to bear closures.
250.136  Affixing closures.

       Subpart H--Records and Reports of Liquors From Puerto Rico

250.163  General requirements.
250.164  Proprietors of taxpaid premises.
250.164a  Package gauge record.
250.165  Certificate of effective tax rate computation.

  Subpart I--Claims for Drawback on Eligible Articles From Puerto Rico

250.170  Drawback of tax.
250.171  Special tax.
250.172  Bonds.
250.173  Claims for drawback.
250.174  Records.

    Subpart Ia--Shipment of Denatured Spirits and Products Made With 
         Denatured Spirits to the United States From Puerto Rico

250.191  Notice of shipment.
250.192  Samples and analysis.
250.193  Notification of tax liability.
250.194  Detention of articles.

Subpart Ib--Shipment of Bulk Distilled Spirits From Puerto Rico, Without 
 Payment of Tax, for Transfer From Customs Custody to Internal Revenue 
                                  Bond

250.196  General.
250.197  Furnishing formula to consignee.
250.198  [Reserved]
250.199  Application and permit to ship, ATF Form 5110.31.
250.199a  Action by revenue agent.
250.199b  Issuance and disposition of permit.
250.199c  Action by carrier.
250.199d  Customs inspection and release.
250.199e  [Reserved]
250.199f  Consignee premises.

   Subpart J--Products Coming Into the United States From the Virgin 
                                 Islands

250.200  Taxable status.
250.201  Products exempt from tax.
250.201a  Production in the Virgin Islands for tax-free shipment to the 
          United States.
250.201b  [Reserved]
250.201c  Shipments of bulk distilled spirits to the United States 
          without payment of tax.
250.202  Requirements of the Federal Alcohol Administration Act.
250.203  Containers of 1 gallon (3.785 liters) or less.
250.203a  Containers in excess of 1 gallon (3.785 liters).
250.204  Regauge.
250.204a  Verification of eligible wines and eligible flavors.
250.205  Certificate.
250.206  Marking packages and cases.
250.207  Destruction of marks and brands.
250.209  Samples.

                      Special (Occupational) Taxes

250.210  Liquor dealer's special taxes.
250.211  Warehouse receipts covering distilled spirits.

        Subpart K--Formulas for Products From the Virgin Islands

250.220  Formulas for liquors.
250.221  Formulas for articles, eligible articles, and products 
          manufactured with denatured spirits.
250.222  Still wines containing carbon dioxide.
250.223  Changes of formulas.
250.224  Filing and disposition of formulas.
250.225  Previously approved formulas.

    Subpart L--Closures for Distilled Spirits From the Virgin Islands

                                 General

250.230  Containers of distilled spirits to bear closures.
250.231  Affixing closures.

      Subpart M--Procedure at Port of Entry From the Virgin Islands

250.260  Certificate.
250.261  Action by district director of customs.
250.262  Determination of tax on distilled spirits.
250.262a  Computation of effective tax rate.
250.263  Determination of tax on beer.
250.264  Determination of tax on wine.
250.265  Determination of tax on articles.
250.266  Tax payment.
250.267  Payment of tax by electronic fund transfer.

    Subpart N--Records and Reports of Liquors From the Virgin Islands

       Record and Report of Liquors Brought Into the United States

250.272  General requirements.
250.273  Proprietors of taxpaid premises.
250.273a  Transfer record.
250.273b  Package gauge record.

               Filing and Retention of Records and Reports

250.275  Filing.
250.276  Retention.

[[Page 26]]

 Report of Disposition of Red Strip Stamps on Discontinuance of Business

250.277  Procedure.

   Subpart O--Tax-Free Shipments to the United States From the Virgin 
                                 Islands

250.291  General.

     Shipment of Industrial Spirits and Specially Denatured Spirits

250.292  Copy of consignee's permit under part 20 or 22.
250.293  Marks on containers.
250.294  Record of shipment.

    Shipment of Completely Denatured Alcohol and Products Made With 
                            Denatured Spirits

250.295  Marks on containers.
250.296  Record of shipment.

                      Arrival in the United States

250.297  General.

Subpart Oa--Shipment of Bulk Distilled Spirits From the Virgin Islands, 
 Without Payment of Tax, for Transfer From Customs Custody to Internal 
                              Revenue Bond

250.300  General.
250.301  Preparation of transfer record.
250.302  Gauge and certification.
250.303  Customs inspection and release.
250.304  Bulk conveyances to be sealed.
250.305  Receipt by consignee.

  Subpart Ob--Claims for Drawback on Eligible Articles From the Virgin 
                                 Islands

250.306  Drawback of tax.
250.307  Special tax.
250.308  Bonds.
250.309  Claims for drawback.
250.310  Records.

               Subpart P--Requirements for Liquor Bottles

250.311  Scope of subpart.
250.312  Standards of fill.
250.314  Distinctive liquor bottles.
250.315  [Reserved]
250.316  Bottles not constituting approved containers.
250.317  Bottles to be used for display purposes.
250.318  Liquor bottles denied entry.
250.319  Used liquor bottles.

                   Subpart Q--Miscellaneous Provisions

250.331  Alternate methods or procedures.

    Authority: 19 U.S.C. 81c; 26 U.S.C. 5001, 5007, 5008, 5010, 5041, 
5051, 5061, 5081, 5111, 5112, 5114, 5121, 5122, 5124, 5131-5134, 5141, 
5146, 5207, 5232, 5271, 5276, 5301, 5314, 5555, 6001, 6301, 6302, 6804, 
7101, 7102, 7651, 7652, 7805; 27 U.S.C. 203, 205; 31 U.S.C. 9301, 9303, 
9304, 9306.

    Source: 20 FR 6077, Aug. 20, 1955, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



                     Subpart A--Scope of Regulations



Sec. 250.1  Alcoholic products coming into the United States from Puerto Rico and the Virgin Islands.

    This part, ``Liquors and Articles from Puerto Rico and the Virgin 
Islands,'' relates to:
    (a) The production, bonded warehousing, and withdrawal of distilled 
spirits and denatured spirits, and the manufacture of articles in Puerto 
Rico and the Virgin Islands to be brought into the United States free of 
tax;
    (b) The collection of internal revenue taxes on taxable alcoholic 
products coming into the United States from Puerto Rico and the Virgin 
Islands;
    (c) The transfer, without payment of tax, of Puerto Rican and Virgin 
Islands spirits in bulk containers or by pipeline from customs custody 
to the bonded premises of a distilled spirits plant qualified under part 
19 of this chapter;
    (d) The deposit of the distilled spirits excise taxes, limited to 
the lesser of $10.50 or the rate in section 5001(a)(1) per proof gallon, 
into the Treasuries of Puerto Rico and the Virgin Islands on all 
articles containing distilled spirits as defined in section 7652, 
produced by those two U.S. possessions, and transported into the United 
States (less certain amounts); and
    (e) The deposit of the distilled spirits excise taxes, limited to 
the lesser of $10.50 or the rate in section 5001(a)(1) per proof gallon, 
into the Treasuries of Puerto Rico and the Virgin Islands on all rum 
imported into the United States (including rum from possessions other 
than Puerto Rico and the Virgin Islands), less certain amounts.

(Approved by the Office of Management and Budget under control number 
1512-0277)

(Sec. 221, Pub. L. 98-67, 97 Stat. 369 (26 U.S.C. 7652)

[T.D. ATF-175, 49 FR 20803, May 16, 1984, as amended by T.D. ATF-203, 50 
FR 15887, Apr. 23, 1985]

[[Page 27]]



Sec. 250.2  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part, including applications, reports, returns, and records. All of 
the information called for in each form shall be furnished as indicated 
by the headings on the form and the instructions on or pertaining to the 
form. In addition, information called for in each form shall be 
furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46920, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5963, Feb. 27, 1987; T.D. ATF-372, 41 FR 20725, May 8, 1996]



                         Subpart B--Definitions



Sec. 250.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
section. Words in the plural form shall include the singular and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not enumerated which are in the same general class.
    Article. Any preparation unfit for beverage use, made with or 
containing:
    (1) Wine or beer;
    (2) Distilled spirits or industrial spirits; or
    (3) Denatured spirits when such preparation is not manufactured 
under the provisions of this chapter.
    ATF officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this part.
    Bank. Any commercial bank.
    Banking day. Any day during which a bank is open to the public for 
carrying on substantially all its banking functions.
    Beer. Beer, ale, porter, stout, and other similar fermented 
beverages (including sake or similar products) of any name or 
description containing one-half of 1 percent or more of alcohol by 
volume, brewed, or produced from malt, wholly or in part, or from any 
substitute therefor.
    Bottler. Any person required to hold a basic permit as a bottler 
under 27 U.S.C. 203(b)(1).
    Bulk container. Any container having a capacity of more than 1 
gallon.
    Bulk distilled spirits. The term ``bulk distilled spirits'' means 
distilled spirits in a container having a capacity in excess of 1 
gallon.
    Bureau of Alcoholic Beverage Taxes. Bureau of Alcoholic Beverage 
Taxes of the Commonwealth of Puerto Rico.
    Business day. Any day, other than a Saturday, Sunday, or a legal 
holiday. (The term legal holiday includes all holidays in the District 
of Columbia and all legal holidays in the Commonwealth of Puerto Rico.)
    Chief, Puerto Rico Operations. The primary representative in Puerto 
Rico of the Bureau of Alcohol, Tobacco and Firearms. His complete 
address is: Chief, Puerto Rico Operations, Bureau of Alcohol, Tobacco 
and Firearms, U.S. Courthouse and Federal Building, Room 659, Avenida 
Carlos Chardon, Hato Rey, Puerto Rico 00919.
    Commercial bank. A bank, whether or not a member of the Federal 
Reserve System, which has access to the Federal Reserve Communications 
System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a 
communications network that allows Federal Reserve System member banks 
to effect a transfer of funds for their customers (or other commercial 
banks) to the Treasury Account at the Federal Reserve Bank of New York.
    Customs officer. Any officer of the Customs Service or any 
commissioned, warrant, or petty officer of the Coast Guard, or any agent 
or other person authorized by law or designated by the Secretary of the 
Treasury to perform any duties of an officer of the Customs Service.
    Denatured spirits. Industrial spirits denatured in accordance with 
approved formulas in distilled spirits plants established and operated 
under the provisions of this chapter relating to the establishment and 
operation of plants qualified to denature spirits in the

[[Page 28]]

United States or, in respect of a product of the Virgin Islands, shall 
also mean spirits denatured in accordance with approved formulas in 
plants established under the provisions of the Virgin Islands 
regulations and shall include, unless otherwise limited, both completely 
and specially denatured spirits.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, D.C.
    Director of the service center. A director of an internal revenue 
service center.
    Distilled spirits or spirits. That substance known as ethyl alcohol, 
ethanol, or spirits of wine, in any form (including all dilutions and 
mixtures thereof, from whatever source or by whatever process produced), 
but shall not include industrial spirits as defined in this part except 
when used in reference to such spirits which would be subject to tax if 
brought into the United States.
    District director. A district director of internal revenue.
    District director of customs. The district director of customs at a 
headquarters port of the district (except the district of New York, 
N.Y.); the area directors of customs in the district of New York, N.Y.; 
and the port director at a port not designated as a headquarters port.
    Effective tax rate. The net tax rate after reduction for any credit 
allowable under 26 U.S.C. 5010 for wine and flavor content at which the 
tax imposed on distilled spirits by 26 U.S.C. 7652 is paid or 
determined.
    Electronic fund transfer or EFT. Any transfer of funds effected by a 
proprietor's commercial bank, either directly or through a correspondent 
banking relationship, via the Federal Reserve Communications System 
(FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of 
New York.
    Eligible article. Any medicine, medicinal preparation, food product, 
flavor, flavoring extract or perfume which contains distilled spirits, 
is unfit for beverage purposes, and has been or will be brought into the 
United States from Puerto Rico or the Virgin Islands under the 
provisions of 26 U.S.C. 7652(g).
    Eligible flavor. A flavor which:
    (1) Is of a type that is eligible for drawback of tax under 26 
U.S.C. 5134,
    (2) Was not manufactured on the premises of a distilled spirits 
plant, and
    (3) Was not subjected to distillation on distilled spirits plant 
premises such that the flavor does not remain in the finished product.
    Eligible wine. Wine on which tax would be imposed by paragraph (1), 
(2), or (3) of 26 U.S.C. 5041(b) but for its removal to distilled 
spirits plant premises and which has not been subject to distillation at 
a distilled spirits plant after receipt in bond.
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the return, claim, form, or other document, or where no form 
of declaration is prescribed, with the declaration: ``I declare under 
the penalties of perjury that this ________ (insert type of document, 
such as statement, report, certificate, application, claim, or other 
document), including the documents submitted in support thereof, has 
been examined by me and, to the best of my knowledge and belief, is 
true, correct, and complete.''
    Fiscal year. The period which begins October 1 and ends on the 
following September 30.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.
    Importer. Any person who imports distilled spirits, wines, or beer 
into the United States.
    Industrial spirits. As to products of Puerto Rico, distilled spirits 
produced and warehoused at and withdrawn from distilled spirits plants 
established and operated under the provisions of this chapter relating 
to the establishment of such plants and the production, bonded 
warehousing, and withdrawal from bond of distilled spirits in the United 
States, or as to products of the Virgin Islands, distilled spirits 
produced, warehoused, and withdrawn under Virgin Islands regulations.
    Kind. As applied to spirits, kind shall mean class and type as 
prescribed in 27

[[Page 29]]

CFR part 5. As applied to wines, kind shall mean the classes and types 
of wines as prescribed in 27 CFR part 4.
    Liquor bottle. A bottle made of glass or earthenware, or of other 
suitable material approved by the Food and Drug Administration, which 
has been designed or is intended for use as a container for distilled 
spirits for sale for beverage purposes and which has been determined by 
the Director to adequately protect the revenue.
    Liquors. Industrial spirits, distilled spirits, liqueurs, cordials 
and similar compounds, wines, and beer or any alcoholic preparation fit 
for beverage use.
    Permit. A formal written authorization of the Secretary of the 
Treasury of Puerto Rico.
    Person. An individual, a trust, an estate, a partnership, an 
association, a company, or a corporation.
    Proof gallon. A gallon of liquid at 60 degrees Fahrenheit which 
contains 50 percent by volume of ethyl alcohol having a specific gravity 
of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees 
Fahrenheit as unity or the alcoholic equivalent thereof.
    Rectifier. Any person required to hold a rectifier's basic permit 
under 27 U.S.C. 203(b)(1).
    Region. A Bureau of Alcohol, Tobacco and Firearms Region.
    Regional director (compliance). The principal ATF regional official 
responsible for administering regulations in this part.
    Revenue Agent. Any duly authorized Commonwealth Internal Revenue 
Agent of the Department of the Treasury of Puerto Rico.
    Secretary. The Secretary of the Treasury of Puerto Rico.
    Secretary or his delegate. The Secretary or any officer or employee 
of the Department of the Treasury of Puerto Rico duly authorized by the 
Secretary to perform the function mentioned or described in this part.
    Taxpaid. As used in this part with respect to liquors or articles of 
Puerto Rican manufacture, includes liquors or articles on which the tax 
was computed but with respect to which payment was deferred under the 
provisions of subpart E of this part.
    Treasury Account. The Department of the Treasury's General Account 
at the Federal Reserve Bank of New York.
    United States. The States and the District of Columbia.
    U.S.C. The United States Code.
    United States Bureau of Alcohol, Tobacco and Firearms office. The 
Bureau of Alcohol, Tobacco and Firearms office in Puerto Rico operating 
under the direction of the Regional Director (Compliance), North 
Atlantic Region, New York, NY 10048.
    Virgin Islands regulations. Regulations issued or adopted by the 
Governor of the Virgin Islands, or his duly authorized agents, with the 
concurrence of the Secretary of the Treasury of the United States, or 
his delegate, under the provisions of 26 U.S.C. 5314, as amended, and 
Sec. 250.201a.
    Wine. Still wine, vermouth, or other aperitif wine, imitation, 
substandard, or artificial wine, compounds designated as wine, flavored, 
rectified, or sweetened wine, champagne or sparkling wine, and 
artificially carbonated wine, containing not over 24 percent of alcohol 
by volume. Wines containing more than 24 percent of alcohol by volume 
are classed and taxed as distilled spirits.

(68A Stat. 917, as amended (26 U.S.C. 7805); 49 Stat. 981, as amended 
(27 U.S.C. 205) Aug. 16, 1954, ch. 736, 68A Stat. 775 (26 U.S.C. 6301); 
June 29, 1956, ch. 462, 70 Stat. 391 (26 U.S.C. 6301))

[T.D. ATF-48, 43 FR 13551, Mar. 31, 1978]

    Editorial Note: For Federal Register citations affecting 
Sec. 250.11, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

Subpart C [Reserved]



 Subpart Ca--Rum Imported Into the United States From Areas Other Than 
                   Puerto Rico and the Virgin Islands



Sec. 250.30  Excise taxes.

    Distilled spirits excise taxes, less the estimated amounts necessary 
for payment of refunds and drawbacks, collected on all rum imported into 
the United States (including rum from possessions other than Puerto Rico 
and the Virgin Islands), will be deposited

[[Page 30]]

into the Treasuries of Puerto Rico and the Virgin Islands according to 
the formula described in Sec. 250.31. The amount deposited into the 
Treasuries of Puerto Rico and the Virgin Islands shall be the lesser of 
$10.50, or the rate imposed by 26 U.S.C. 5001(a)(1) (including 
adjustments to the effective tax rate under 26 U.S.C. 5010), on each 
proof gallon of rum imported into the United States.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652))

[T.D. ATF-203, 50 FR 15888, Apr. 23, 1985]



Sec. 250.31  Formula.

    (a) The amount of excise taxes collected on rum that is imported 
into the United States from areas other than Puerto Rico and the Virgin 
Islands shall be deposited into the Treasuries of Puerto Rico and the 
Virgin Islands at the rate prescribed in 26 U.S.C. 7652(f). The 
distribution of such amount between Puerto Rico and the Virgin Islands 
shall be computed by using a permanent base percentage, which represents 
the excise taxes collected on rum brought into the United States from 
Puerto Rico and the Virgin Islands during fiscal year 1983. This base 
percentage is 87.626889 percent for Puerto Rico and 12.373111 percent 
for the Virgin Islands. The formula shall be as follows:
    (1) Multiply the total excise taxes collected on rum brought into 
the United States (including rum from Puerto Rico and the Virgin 
Islands) during the previous fiscal year (October 1-September 30) by the 
base percentages to determine the relative shares of the entire U.S. rum 
market that will be allotted to Puerto Rico and the Virgin Islands;
    (2) Subtract each of these shares from the excise taxes collected on 
rum transported to the United States from Puerto Rico and the Virgin 
Islands, respectively, during the previous fiscal year to determine each 
possession's loss or gain in relation to the previous fiscal year's U.S. 
rum market. Divide these results by the excise taxes collected on rum 
imported during the previous fiscal year from areas other than Puerto 
Rico and the Virgin Islands.
    (b) Notwithstanding the formula prescribed in paragraph (a) above, 
the Virgin Islands' share of the excise taxes on rum imported into the 
United States from areas other than Puerto Rico and the Virgin Islands 
shall not exceed 49 percent nor drop below 12.373111 percent. Puerto 
Rico's share of the excise taxes on rum imported into the United States 
from areas other than Puerto Rico and the Virgin Islands shall not 
exceed 87.626889 percent nor drop below 51 percent.
    (c) The percentage for the distribution of the excise taxes 
collected on rum imported into the United States from areas other than 
Puerto Rico and the Virgin Islands, that will be paid over to the 
Treasuries of Puerto Rico and the Virgin Islands, shall be effective on 
March 1 of each year, and shall remain in effect until March 1 of the 
following year.
    (d) The method for transferring the excise tax collections on rum 
imported from areas other than Puerto Rico and the Virgin Islands, into 
the Treasuries of Puerto Rico and the Virgin Islands shall be the same 
as the method used for transferring excise taxes into the Treasury of 
Puerto Rico on distilled spirits (with an alcohol content of at least 92 
percent rum) brought into the United States from Puerto Rico.
    (e) The formula prescribed in this section shall take effect on 
March 1, 1987. Prior to that date, Puerto Rico shall continue to receive 
86.4 percent of the eligible excise taxes on rum imported from areas 
other than Puerto Rico and the Virgin Islands. The Virgin Islands shall 
continue to receive 13.6 percent of these eligible excise taxes until 
March 1, 1987.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652))

[T.D. ATF-233, 51 FR 28078, Aug. 5, 1986; 52 FR 2222, Jan. 21, 1987]



   Subpart Cb--Products Coming Into the United States From Puerto Rico



Sec. 250.35  Taxable status.

    (a) Liquors coming into the United States from Puerto Rico, except 
as provided in Sec. 250.36, are subject to a tax equal to the internal 
revenue tax imposed on the production in the United States of like 
liquors. Articles coming

[[Page 31]]

into the United States from Puerto Rico, except as provided in 
Sec. 250.36, are subject to tax on the liquors contained therein at the 
rates imposed in the United States on like liquors of domestic 
production.
    (b) The excise taxes collected on distilled spirits or articles 
containing distilled spirits shall be deposited into the Treasury of 
Puerto Rico only if at least 92 percent of the alcoholic content of such 
products is rum. The amount deposited into the Treasury of Puerto Rico 
shall not exceed the lesser of $10.50, or the rate imposed by 26 U.S.C. 
5001(a)(1) (including adjustments to the effective tax rate under 26 
U.S.C. 5010), on each proof gallon of such distilled spirits or 
articles, other than eligible articles, containing distilled spirits 
coming into the United States or consumed on the island. Such excise tax 
deposits will be reduced by the estimated amount necessary for payment 
of refunds and drawbacks.
    (c) Except for products described in 26 U.S.C. 7652(c), no excise 
taxes shall be deposited into the Treasury of Puerto Rico if an excise 
tax subsidy is provided by Puerto Rico that is of a kind different from, 
or in an amount per value or volume of production greater than, any 
subsidy offered by Puerto Rico to industries manufacturing products not 
subject to Federal excise tax.

(Sec. 2682, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 7652))

[T.D. ATF-175, 49 FR 20804, May 16, 1984, as amended by T.D. ATF-203, 50 
FR 15888, Apr. 23, 1985; T.D. ATF-263, 52 FR 46593, Dec. 9, 1987]



Sec. 250.36  Products exempt from tax.

    (a) General. Industrial spirits, denatured spirits, and products 
made with denatured spirits in Puerto Rico may be brought into the 
United States without incurring tax liability imposed by 26 U.S.C. 5001 
or 7652.
    (b) Industrial spirits. A distiller of industrial spirits who 
registers, files a bond, and pays special (occupational) tax as a 
distilled spirits plant in accordance with part 19 of this chapter may 
ship industrial spirits to a tax-free alcohol user in the United States 
who holds a permit and has paid special (occupational) tax under part 22 
of this chapter. These shipments shall be made in accordance with the 
requirements of parts 19 and 22 of this chapter.
    (c) Denatured spirits. A distiller who registers, files a bond, and 
pays special (occupational) tax as a distilled spirits plant in 
accordance with part 19 of this chapter and who denatures spirits in 
accordance with parts 19 and 21 of this chapter may ship (1) completely 
denatured alcohol to anyone in the United States, and/or (2) specially 
denatured spirits to a dealer or user of specially denatured spirits in 
the United States or Puerto Rico who holds a permit and has paid special 
(occupational) tax under part 20 of this chapter. These shipments shall 
be made in accordance with the requirements of parts 19 and 20 of this 
chapter, and subpart Ia of this part.
    (d) Products made with denatured spirits. (1) A person in Puerto 
Rico who manufactures products with completely denatured alcohol in 
accordance with the requirements of part 20 of this chapter may ship 
those products to the United States in accordance with the requirements 
of part 20 of this chapter, and subpart Ia of this part.
    (2) A person in Puerto Rico who manufactures products with specially 
denatured spirits may ship those products to the United States if that 
person (i) obtains a permit to use specially denatured spirits, and pays 
special (occupational) tax, under part 20 of this chapter, and (ii) 
complies with the requirements of part 20 of this chapter and subpart Ia 
of this part relating to the manufacture and shipment of those products.

[T.D. ATF-199, 50 FR 9198, Mar. 6, 1985; T.D. ATF-199, 50 FR 20099, May, 
14, 1985, as amended by T.D. ATF-271, 53 FR 17559, May 17, 1988]



Secs. 250.36a-250.36b  [Reserved]



Sec. 250.36c  Shipments of bulk distilled spirits to the United States without payment of tax.

    Bulk distilled spirits may be brought into the United States from 
Puerto Rico without payment of tax for transfer from customs custody to 
the bonded premises of a distilled spirits plant qualified under part 19 
of this chapter.

[[Page 32]]

Such shipments are subject to the provisions of subpart Ib.

[T.D. ATF-62, 44 FR 71709, Dec. 11, 1979]



Sec. 250.37  United States Bureau of Alcohol, Tobacco and Firearms office.

    The United States Bureau of Alcohol, Tobacco and Firearms office is 
authorized to collect internal revenue taxes on liquors and articles 
subject to tax, which are to be shipped to the United States. Whenever 
the internal revenue tax is paid in Puerto Rico, other than by tourists 
in accordance with subpart F of this part, the tax shall be paid to the 
United States Bureau of Alcohol, Tobacco and Firearms office as defined 
in this part and as provided in subpart E of this part.

[T.D. ATF-251, 52 FR 19338, May 22, 1987]



Sec. 250.38  Containers of distilled spirits.

    Containers of distilled spirits brought into the United States from 
Puerto Rico, having a capacity of not more than 1 gallon (3.785 liters), 
shall conform to the requirements of subpart P of this part.

[T.D. ATF-34, 41 FR 46863, Oct. 26, 1976]



Sec. 250.39  Labels.

    All labels affixed to bottles of liquors coming into the United 
States shall conform to the requirements of the Federal Alcohol 
Administration Act and implementing regulations (parts 4, 5, and 7 of 
this chapter).

[T.D. ATF-48, 44 FR 55851, Sept. 28, 1979]



Sec. 250.40  Marking containers of distilled spirits.

    The distiller, rectifier, or bottler shall serially number each 
case, barrel, cask, or similar container of distilled spirits filled for 
shipment to the United States. In addition to the serial number of the 
container, the distiller, rectifier, or bottler shall plainly print, 
stamp, or stencil with durable coloring material, in letters and figures 
not less than one-half inch high, on the head of each barrel, cask or 
similar container or on one side of each case, as follows:
    (a) The name of the distiller, rectifier, or bottler.
    (b) The brand name and kind of liquor;
    (c) The wine and proof gallon contents; or, for bottles filled 
according to the metric standards of fill prescribed by Sec. 5.47a, of 
this chapter, the contents in liters and the proof of the spirits; and
    (d) In the case of barrels or casks, the serial number of the permit 
to ship, Form 487-B, prefixed by the number of such form (e.g., ``487-B-
61-1'')
    (e) In the case of bulk containers shipped to the United States 
under subpart Ib, the serial number of the application and permit to 
ship, ATF Form 5110.31, instead of the serial number of Form 487-B.

[T.D. ATF-43, 42 FR 30836, June 17, 1977; as amended by T.D. ATF-62, 44 
FR 71709, Dec. 11, 1979]



Sec. 250.41  Destruction of marks and brands.

    The marks, brands, and serial numbers required by this part to be 
placed on barrels, casks, or similar containers, or cases, shall not be 
removed or obscured or obliterated before the contents thereof have been 
removed.

(Sec. 201, Pub. L. 85-859, 1358, as amended, 26 U.S.C. 5205)

[T.D. ATF-198, 50 FR 8548, Mar. 1, 1985]



Sec. 250.43  Samples.

    The Director may require samples of liquors and articles to be 
submitted whenever desired for laboratory analysis in order to determine 
the rates of tax applicable thereto.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2250, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

                      Special (Occupational) Taxes



Sec. 250.44  Liquor dealer's special taxes.

    Every person bringing liquors into the United States from Puerto 
Rico, who sells, or offers for sale, such liquors shall file Form 5630.5 
with ATF in accordance with the instructions of the form, and pay 
special (occupational) tax as a wholesale dealer in liquor or as a 
retail dealer in liquor in accordance with the law and regulations 
governing

[[Page 33]]

the payment of such special taxes (part 194 of this chapter).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340 as amended, 1343 as amended, 
1344 as amended (26 U.S.C. 5111, 5112, 5121, 5122))

[T.D. ATF-70, 45 FR 33980, May 21, 1980, as amended by T.D. ATF-251, 52 
FR 19338, May 22, 1987]



Sec. 250.45  Warehouse receipts covering distilled spirits.

    Since the sale of warehouse receipts for distilled spirits is 
equivalent to the sale of distilled spirits, every person bringing 
distilled spirits into the United States from Puerto Rico, who sells, or 
offers for sale, warehouse receipts for distilled spirits stored in 
warehouses, or elsewhere, incurs liability to special tax as a dealer in 
liquors at the place where such warehouse receipts are sold, or offered 
for sale, and must file return and pay occupational tax as provided in 
Sec. 250.44.

(68A Stat. 618, 620, 621; 26 U.S.C. 5111, 5112, 5121, 5122)



Sec. 250.46  Distilled spirits plant proprietor's special (occupational) tax.

    Every proprietor of a distilled spirits plant producing industrial 
spirits, denatured spirits, or products made with denatured spirits, for 
shipment to the United States, shall file Form 5630.5 with ATF in 
accordance with instructions on the form and pay special (occupational) 
tax as a distilled spirits plant proprietor in accordance with part 19 
of this chapter.

(26. U.S.C. 5081, 5314)

[T.D. ATF-271, 53 FR 17559, May 17, 1988]



Sec. 250.47  Specially denatured spirits user's and dealer's special (occupational) taxes.

    Every user of specially denatured spirits who manufactures products 
made with such spirits for shipment to the United States, and every 
dealer in specially denatured spirits who ships such spirits to the 
United States, who is required by Sec. 250.36 to obtain a permit under 
part 20 of this chapter, shall file Form 5630.5 with ATF in accordance 
with instructions on the form and pay special (occupational) tax as a 
user or dealer in specially denatured spirits under part 20 of this 
chapter.

(.S.C. 5271, 5276, 5314)

[T.D. ATF-271, 53 FR 17559, May 17, 1988]



            Subpart D--Formulas for Products From Puerto Rico

    Source: 44 FR 71709, Dec. 11, 1979, unless otherwise noted.



Sec. 250.50  Formulas for liquors.

    (a) Distilled spirits products. Except for products which are exempt 
from tax, as specified in Sec. 250.36, formulas are required by part 5 
of this chapter for distilled spirits products shipped to the United 
States from Puerto Rico. If a formula is submitted to cover only the 
production of spirits which are to be transferred to the bonded premises 
of a DSP under 26 U.S.C. 5232, the formula shall include a statement to 
that effect. If any product contains liquors made outside of Puerto 
Rico, the country of origin for each such liquor shall be stated on the 
formula. These formulas shall be submitted on ATF Form 5110.38, in 
accordance with Sec. 250.54.
    (b) Wine. Persons in Puerto Rico who ship wine to the United States 
shall comply with the formula requirements of 27 CFR part 240. If any 
wine contains liquors made outside of Puerto Rico, the country of origin 
for each such liquor shall be stated on the formula. All formulas 
required by this paragraph shall be submitted on ATF Form 698 
Supplemental, in accordance with Sec. 250.54.

(Approved by the Office of Management and Budget under control number 
1512-0204)

[T.D. ATF-198, 50 FR 8549, Mar. 1, 1985]



Sec. 250.50a  Verification of eligible flavors.

    (a) Any person who, after December 1, 1990, ships to the United 
States any distilled spirits on which the tax has been or is to be paid 
or determined at an effective tax rate based in part on the alcohol 
content derived from any eligible flavor not previously approved on ATF 
Form 5530.5 (1678) or 5150.19 shall, before the first tax determination 
at that rate, request and receive a statement of eligibility for each 
flavor

[[Page 34]]

to be used in the computation of the effective tax rate.
    (b) To receive a statement of eligibility, the person shipping the 
distilled spirits shall submit to the ATF National Laboratory, 1401 
Research Boulevard, Rockville, MD 20850, the following:
    (1) An 8-ounce sample; and
    (2) A statement of composition listing the--
    (i) Name and percentage of alcohol by volume of the flavor; and
    (ii) Name and quantity of each ingredient used in the manufacture of 
the flavor.

(Approved by Office of Management and Budget under control number 1512-
0203)

(Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 
U.S.C. 7652); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 
U.S.C. 5001); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 
U.S.C. 5010))

[T.D. ATF-297, 55 FR 18066, Apr. 30, 1990]



Sec. 250.51  Formulas for articles, eligible articles and products manufactured with denatured spirits.

    (a) Formulas for articles and eligible articles. Formulas for 
articles made with distilled spirits must show the quantity and proof of 
the distilled spirits used, and the percentage of alcohol by volume 
contained in the finished product. Formulas for articles made with beer 
or wine must show the kind and quantity thereof (liquid measure), and 
the percent of alcohol by volume of such beer or wine. Formulas and 
samples for eligible articles are required in accordance with subpart F 
of part 17 of this chapter.
    (b) Formulas for products manufactured with denatured spirits. 
Products manufactured with denatured spirits shall be manufactured in 
accordance with the formula requirements of part 20 of this chapter for 
similar products made in the United States.
    (1) Products may be made with completely denatured alcohol for sale 
under brand names under part 20 of this chapter without obtaining an 
approved formula. If ingredients are added in sufficient quantities to 
materially change the composition and character of the completely 
denatured alcohol, the product is not classified as completely denatured 
alcohol and may not be marked, branded, or sold as completely denatured 
alcohol.
    (2) Products made with specially denatured spirits shall be made in 
accordance with (i) a general-use formula approved as provided in part 
20 of this chapter, or (ii) an approved formula on Form 5150.19, or 
previously approved on ATF Form 1479-A or 27-B Supplemental.
    (c) Formulas required. Formulas required by this section shall be 
submitted on Form 5150.19, except that formulas for eligible articles 
shall be submitted on Form 5154.1 (formerly 1678). Formulas shall be 
submitted in accordance with Sec. 250.54. Any formula for an eligible 
article approved on Form 5150.19 prior to October 23, 1986 shall 
continue to be valid until revoked or voluntarily surrendered. Any 
person holding such a formula is not required to submit a new formula.

(Approved by the Office of Management and Budget under control number 
1512-0494)

[44 FR 71709, Dec. 11, 1979, as amended by T.D. ATF-199, 50 FR 9198, 
Mar. 6, 1985; T.D. ATF-263, 52 FR 46593, Dec. 9, 1987; T.D. ATF-379, 61 
FR 31427, June 20, 1996]



Sec. 250.52  Still wines containing carbon dioxide.

    (a) General. Still wines may contain not more than 0.392 gram of 
carbon dioxide per 100 milliliters of wine; except that a tolerance to 
this maximum limitation, not to exceed 0.009 gram of carbon dioxide per 
100 milliliters of wine, will be allowed where the amount of carbon 
dioxide in excess of 0.392 gram per 100 milliliters of wine was due to 
mechanical variations which could not be completely controlled under 
good commercial practices. Such tolerance will not be allowed where it 
is found that the limitation of 0.392 gram of carbon dioxide per 100 
milliliters of wine is continuously or intentionally exceeded, or where 
the variation results from the use of methods or equipment not in accord 
with good commercial practices.
    (b) Notice required. Proprietors intending to add carbon dioxide to, 
or retain carbon dioxide in, still wines to be shipped to the United 
States shall submit a notice to the Chief, Puerto Rican Operations. The 
notice shall show the name and address of the proprietor and

[[Page 35]]

shall identify the method or process, the kinds (class and type) of 
wine, and the type of equipment to be used. A corrected notice shall be 
filed if there is any change (except for minor changes) in the 
information contained in the notice.
    (c) Filing and disposition of notice. The notice required by 
paragraph (b) of this section shall be submitted in quadruplicate to the 
Chief, Puerto Rican Operations, who shall retain one copy, forward one 
copy to the Secretary, and one copy to the revenue agent at the 
proprietor's premises, and return one copy to the proprietor. The 
proprietor shall keep the notice available for examination by revenue 
agents.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended (26 U.S.C 5041))

[20 FR 6077, Aug. 20, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. ATF-251, 
52 FR 19338, May 22, 1987]



Sec. 250.53  Changes of formulas.

    Any change in the ingredients composing a product covered by an 
approved formula will necessitate the submission of a new formula.



Sec. 250.54  Filing and disposition of formulas.

    Prior to shipment, formulas required by this subpart shall be 
submitted in quadruplicate to and approved by the Director. The Director 
shall retain one copy, forward one copy to the Secretary, and one copy 
to the revenue agent at the premises of the applicant, and return one 
copy to the applicant. The applicant shall maintain copies of approved 
formulas available for examination by revenue agents.

[44 FR 71709, Dec. 11, 1979, as amended by T.D. ATF-251, 52 FR 19338, 
May 22, 1987]



Sec. 250.55  Previously approved formulas.

    Any formula approved on Form 27-B Supplemental prior to January 1, 
1980, shall continue to be valid until revoked or voluntarily 
surrendered. Any person holding such a formula is not required to submit 
a new formula. If an approved formula on Form 27-B Supplemental 
indicates that carbon dioxide will be added to, or retained in, still 
wine, the notice requirement of Sec. 250.52 shall not apply.



      Subpart E--Taxpayment of Liquors and Articles in Puerto Rico

    Source: T.D. 6551, 26 FR 1490, Feb. 22, 1961, unless otherwise 
noted. Redesignated at 40 FR 16835, Apr. 15, 1975.

                                  Bonds



Sec. 250.61  General.

    Every person filing a bond under this subpart, or consent of surety 
on such bond, shall file it with the regional director (compliance). Any 
bond or consent of surety approved prior to July 1, 1987, by the 
Officer-in-Charge, United States Internal Revenue Service shall continue 
to be valid until terminated as provided in this subpart.

[T.D. ATF-251, 52 FR 19338, May 22, 1987]



Sec. 250.62  Corporate surety.

    (a) Surety bonds may be given only with corporate sureties holding 
certificates of authority from, and subject to the limitations 
prescribed by, the Secretary of the Treasury, as set forth in the 
current revision of U.S. Treasury Department Circular No. 570 (Companies 
Holding Certificates of Authority as Acceptable Sureties on Federal 
Bonds and as Acceptable Reinsuring Companies).
    (b) Treasury Department Circular No. 570 is published in the Federal 
Register annually as of the first workday in July. As they occur, 
interim revisions of the circular are published in the Federal Register. 
Copies of the circular may be obtained from the Audit Staff, Bureau of 
Government Financial Operations, Department of the Treasury, Washington, 
DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7))

[T.D. ATF-92, 46 FR 46921, Sept. 23, 1981]



Sec. 250.62a  Filing of powers of attorney.

    Each bond, and each consent to changes in the terms of a bond, shall 
be accompanied by a power of attorney authorizing the agent or officer 
who executed the bond or consent to so act on behalf of the surety. The 
regional

[[Page 36]]

director (compliance) who is authorized to approve the bond may, when he 
deems it necessary, require additional evidence of the authority of the 
agent or officer to execute the bond or consent.

(61 Stat. 648; 6 U.S.C. 6, 7)

[T.D. ATF-2, 37 FR 22736, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, as amended by T.D. ATF-251, 52 FR 19338, May 22, 1987]



Sec. 250.62b  Execution of powers of attorney.

    The power of attorney shall be prepared on a form provided by the 
surety company and executed under the corporate seal of the company. If 
the power of attorney submitted is other than a manually signed 
original, it shall be accompanied by certification of its validity.

(61 Stat. 648; 6 U.S.C. 6, 7)

[T.D. ATF-2, 37 FR 22736, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975]



Sec. 250.63  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the principal may pledge and deposit, 
as surety for his bond, securities which are transferable and are 
guaranteed as to both interest and principal by the United States, in 
accordance with the provisions of 31 CFR part 225--Acceptance of Bonds, 
Notes or Other Obligations Issued or Guaranteed by the United States as 
Security in Lieu of Surety or Sureties on Penal Bonds.

(5 U.S.C. 552(a) (80 Stat. 383, as amended); 61 Stat. 650; 6 U.S.C. 15)

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-92, 46 FR 46921, Sept. 23, 1981]



Sec. 250.64  Consents of surety.

    Consents of surety to changes in the terms of bonds shall be 
executed on Form 1533 by the principal and by the surety with the same 
formality and proof of authority as is required for the execution of 
bonds.



Sec. 250.65  Authority to approve bonds and consents of surety.

    The regional director (compliance) is authorized to approve all 
bonds and consents of surety filed under this part.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987]



Sec. 250.66  Bond, ATF Form 5110.50--Distilled spirits.

    (a) General. If any person intends to ship to the United States, 
distilled spirits products of Puerto Rican manufacture from bonded 
storage in Puerto Rico on computation, but before payment, of the tax 
imposed by 26 U.S.C. 7652(a), equal to the tax imposed in the United 
States by 26 U.S.C. 5001(a)(1), he shall, before making any such 
shipment, furnish a bond ATF Form 5110.50, for each premises from which 
shipment will be made, to secure payment of such tax, at the time and in 
the manner prescribed in this subpart, on all distilled spirits products 
shipped. The bond shall be executed in a penal sum not less than the 
amount of unpaid tax which, at any one time, is chargeable against the 
bond. The penal sum of such bond shall not exceed $1,000,000, but in no 
case shall the penal sum be less than $1,000.
    (b) Blanket bond. Any person who is the proprietor of more than one 
premises in Puerto Rico from which shipment of spirits to the United 
States will be made, may, in lieu of furnishing two or more separate 
bonds on ATF Form 5110.50 as required by paragraph (a) of this section, 
furnish a blanket bond on ATF Form 5110.50. The penal sum of such 
blanket bond shall be equal to the sum of the penal sums of all the 
bonds in lieu of which it is given. Such blanket bond on ATF Form 
5110.50 shall show each bonded warehouse and/or bonded processing room 
and/or rectifying plant to be covered by the bond, and the part of the 
total penal sum (computed in accordance with paragraph (a) of this 
section) to be allocated to each of the designated premises. If the 
penal sum of the bond allocated to a designated premises is in an amount 
less than the maximum prescribed in paragraph (a) of this section, 
transactions at such premises shall not

[[Page 37]]

exceed the quantity permissible, as reflected by the penal sum allocated 
in the bond to such premises. Such blanket bond shall contain the terms 
and conditions of the bonds in lieu of which it is given and shall be 
conditioned that the total amount of the bond shall be available for 
satisfaction of any liability incurred under the terms and conditions of 
such bond.

(Act of August 16, 1954, 68A Stat. 847, as amended, 907, as amended (26 
U.S.C 7101, 7102, 7652))

[T.D. ATF-62, 44 FR 71710, Dec. 11, 1979]



Sec. 250.67  Bond, Form 2897--Wine.

    Where a proprietor intends to withdraw, for purpose of shipment to 
the United States, wine of Puerto Rican manufacture from bonded storage 
in Puerto Rico on computation, but before payment, of the tax imposed by 
26 U.S.C. 7652(a), equal to the tax imposed in the United States by 26 
U.S.C. 5041, he shall, before making any such withdrawal, furnish a 
bond, Form 2897, to secure payment of such tax, at the time and in the 
manner prescribed in this subpart, on all wine so withdrawn. The bond 
shall be executed in a penal sum not less than the amount of unpaid tax 
which, at any one time, is chargeable against the bond: Provided, That 
the penal sum of such bond shall not exceed $250,000, but in no case 
shall the penal sum be less than $500.

(Aug. 16, 1954, Chapter 736, 68A Stat. 775, as amended, 847, as amended, 
906, 907, as amended (26 U.S.C. 6302, 7101, 7102, 7651(2)(B), 7652(a)))

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55852, Sept. 28, 1979]



Sec. 250.68  Bond, Form 2898--Beer.

    Where a brewer intends to withdraw, for purpose of shipment to the 
United States, beer of Puerto Rican manufacture from bonded storage in 
Puerto Rico on computation, but before payment, of the tax imposed by 26 
U.S.C. 7652(a), equal to the tax imposed in the United States by 26 
U.S.C. 5051, he shall, before making any such withdrawal, furnish a 
bond, Form 2898, to secure payment of such tax, at the time and in the 
manner prescribed in this subpart, on all beer so withdrawn. The bond 
shall be executed in a penal sum not less than the amount of unpaid tax 
which, at any one time, is chargeable against the bond: Provided, That 
the penal sum of such bond shall not exceed $500,000, but in no case 
shall the penal sum be less than $1,000.

(Aug. 16, 1954, Chapter 736, 68A Stat. 775, as amended, 847, as amended, 
906, 907, as amended (26 U.S.C. 6302, 7101, 7102, 7651(2)(B), 7652(a)))

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55852, Sept. 28, 1979]



Sec. 250.68a  Bond account.

    Every person who files a bond under this subpart shall keep an 
account of the charges against and credits to the bond if the penal sum 
of his bond is less than the maximum prescribed in Secs. 250.66(a), 
250.67, or Sec. 250.68, or if the penal sum allocated to his premises 
under Sec. 250.66(b) is less than the prescribed maximum. He shall 
charge the bond with the amount of liability he accepts at the time he 
executes ATF Form 5110.51 or 2900, and shall credit the bond with the 
amount of the tax paid at the time he files each return, ATF Form 
5110.32, 2927, or 2929, and remittance. The account shall also show the 
balance available under the bond at any one time.

[T.D. ATF-62, 44 FR 71710, Dec. 11, 1979]



Sec. 250.69  Strengthening bonds.

    In all cases where the penal sum of any bond becomes insufficient, 
the principal shall either give a strengthening bond with the same 
surety to attain a sufficient penal sum, or give a new bond to cover the 
entire liability. Strengthening bonds will not be approved where any 
notation is made thereon which is intended, or which may be construed, 
as a release of any former bond, or as limiting the amount of any bond 
to less than its full penal sum. Strengthening bonds shall show the 
current date of execution and the effective date.



Sec. 250.70  New or superseding bonds.

    New bonds shall be required in case of insolvency or removal of any 
surety,

[[Page 38]]

and may, at the discretion of the regional director (compliance), be 
required in any other contingency affecting the validity or impairing 
the efficiency of an existing bond. Executors, administrators, 
assignees, receivers, trustees, or other persons acting in a fiduciary 
capacity, continuing or liquidating the business of the principal, shall 
execute and file a new bond or obtain the consent of the surety or 
sureties on the existing bond or bonds. Where, under the provisions of 
Sec. 250.72, the surety on any bond given under this subpart has filed 
an application to be relieved of liability under said bond and the 
principal desires or intends to continue the operations to which such 
bond relates, he shall file a valid superseding bond to be effective on 
or before the date specified in the surety's notice. New or superseding 
bonds shall show the current date of execution and the effective date.

[T.D. 6551, 26 FR 1590, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987]



Sec. 250.70a  Notice of approval of bonds.

    Upon approval of an original, a strengthening, or a superseding 
bond, the regional director (compliance) shall notify the Secretary, and 
the revenue agent at the premises, of the total penal sum of the bond or 
bonds, and in the case of a blanket bond, the amount of the penal sum 
allocated to the premises.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987]

                          Termination of Bonds



Sec. 250.71  Termination of bonds.

    Any bond given under the provisions of this subpart may be 
terminated as to future transactions--
    (a) Pursuant to application of surety as provided in Sec. 250.72;
    (b) On approval of a superseding bond;
    (c) On notification by the principal to the regional director 
(compliance) that he has discontinued transactions under the bond; or
    (d) On notification by the principal to the regional director 
(compliance) that he has discontinued business.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987]



Sec. 250.72  Application of surety for relief from bond.

    A surety on any bond given under the provisions of this subpart may 
at any time in writing notify the principal and the regional director 
(compliance) that he desires, after a date named, to be relieved of 
liability under said bond. Such date shall be not less than 10 days 
after the date the notice is received by the regional director 
(compliance). The surety shall also file with the regional director 
(compliance) an acknowledgment or other proof of service on the 
principal. If such notice is not thereafter in writing withdrawn, the 
rights of the principal as supported by said bond shall be terminated on 
the date named in the notice, and the surety shall be relieved from 
liability to the extent set forth in Sec. 250.73.

(Approved by the Office of Management and Budget under control number 
1512-0352)

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. 
ATF-251, 52 FR 19338, May 22, 1987]



Sec. 250.73  Relief of surety from bond.

    Where the surety on a bond given under the provisions of this 
subpart has filed application for relief from liability, as provided in 
Sec. 250.72, the surety shall be relieved from liability for 
transactions occurring wholly subsequent to the date specified in the 
notice, or the effective date of a new bond, if one is given.



Sec. 250.74  Release of pledged securities.

    Securities of the United States pledged and deposited as provided in 
Sec. 250.63, shall be released only in accordance with the provisions of 
31 CFR part 225. Such securities will not be released by the regional 
director (compliance) until the liability under the bond for which they 
were pledged has been terminated. When the regional director 
(compliance) is satisfied that they may

[[Page 39]]

be released, he shall fix the date or dates on which a part or all of 
such securities may be released. At any time prior to the release of 
such securities, the regional director (compliance) may extend the date 
of release for such additional length of time as he deems necessary.

(61 Stat. 650; 6 U.S.C. 15)

[T.D. 6551, 26 FR 1590, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987]



Sec. 250.75  Form 1490, Notice of Termination of Bond.

    When the regional director (compliance) is satisfied that any bond 
given under the provisions of this subpart may be terminated, he shall 
issue Form 1490, Notice of Termination of Bond, and shall forward copies 
to the principal and to the surety. The regional director (compliance) 
shall, prior to the termination date, notify the Secretary and the 
revenue agent of the proposed termination of any bond given under this 
part and the date of such termination.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963, as amended by T.D. ATF-2, 37 FR 
22736, Oct. 21, 1972. Redesignated at 40 FR 16835, Apr. 15, 1975, and 
amended bt T.D. ATF-251, 52 FR 19338, May 22, 1987]

                            Permits Required



Sec. 250.76  Insular permits.

    Before liquors or articles of Puerto Rican manufacture may be 
shipped to the United States, an insular permit, ATF Form 5110.51 (for 
distilled spirits) or Form 2900 (for wine or beer), to compute the taxes 
imposed by 26 U.S.C. 7652(a), and to withdraw the products from the 
bonded establishment where they may be deposited, must be obtained from 
the Secretary, and such products may not be shipped to the United States 
until a permit to ship, on Form 487B, is applied for and obtained from 
the Secretary.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 250.76, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

                            Distilled Spirits



Sec. 250.77  Subject to tax.

    (a) Distilled spirits of Puerto Rican manufacture, and any products 
containing such distilled spirits, brought into the United States and 
withdrawn for consumption or sale are subject to a tax equal to the tax 
imposed in the United States by 26 U.S.C. 5001.
    (b) A credit against the tax imposed on distilled spirits by 26 
U.S.C. 7652 is allowable under 26 U.S.C. 5010 on each proof gallon of 
alcohol derived from eligible wine or from eligible flavors which do not 
exceed 2\1/2\ percent of the finished product on a proof gallon basis. 
The credit is allowable at the time the tax is payable as if it 
constituted a reduction in the rate of tax.
    (c) Where credit against the tax is desired, the person liable for 
the tax shall establish an effective tax rate in accordance with 
Sec. 250.79a. The effective tax rate established will be applied to each 
withdrawal or other disposition of the distilled spirits for consumption 
or sale within the United States.

(Approved by Office of Management and Budget under control number 1512-
0203)

(Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 
U.S.C. 7652); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 
U.S.C. 5001); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 
U.S.C. 5010))

[T.D. ATF-297, 55 FR 18066, Apr. 30, 1990]



Sec. 250.78  Application and permit, ATF Form 5110.51.

    Application for permit to compute the tax on, and to withdraw, 
distilled spirits shall be made on ATF Form 5110.51, in quintuplicate, 
by the proprietor. The proprietor shall forward all copies of the form 
to the Secretary. If the application is properly prepared and is 
otherwise in order, the Secretary or his delegate shall execute the 
permit, retain one copy, and forward the original and remaining copies 
of the form to the revenue agent at the premises where the products are 
located.

[T.D. ATF-62, 44 FR 71711, Dec. 11, 1979, as amended by T.D. ATF-251, 52 
FR 19338, May 22, 1987]

[[Page 40]]



Sec. 250.79  Inspection or gauge and computation of tax.

    On receipt of permit to compute the tax on ATF Form 5110.51, the 
revenue agent shall:
    (a) In the case of spirits in packages, prepare a gauge record as 
provided in Sec. 250.164a in quadruplicate, compute the tax thereon, and 
attach all copies of the gauge record to ATF Form 5110.51;
    (b) In the instance of spirits in cases, verify by inspection the 
quantity of spirits described on the form; or
    (c) In the case of spirits in a bulk conveyance, verify by gauge or 
inspection the quantity of spirits described on the form.

If the revenue agent determines any variation between his gauge and the 
quantity of spirits described on Form 5110.51, he shall amend and 
initial the data in part I of the form. The revenue agent shall deliver 
all copies of Form 5110.51 and any accompanying package gauge record to 
the proprietor. The proprietor shall then compute and enter the amount 
of tax on all copies of Form 5110.51.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8549, Mar. 1, 1985]



Sec. 250.79a  Computation of effective tax rate.

    (a) The proprietor shall compute the effective tax rate for 
distilled spirits containing eligible wine or eligible flavors as the 
ratio of the numerator and denominator as follows:
    (1) the numerator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product 
(exclusive of distilled spirits derived from eligible flavors), 
multiplied by the tax rate prescribed by 26 U.S.C. 5001;
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by the tax rate prescribed by 26 U.S.C. 5041(b) (1), (2), or 
(3), as applicable; and
    (iii) The proof gallons of all distilled spirits derived from 
eligible flavors used in the product, multiplied by the tax rate 
prescribed by 26 U.S.C. 5001, but only to the extent that such distilled 
spirits exceed 2\1/2\% of the denominator prescribed in paragraph (a)(2) 
of this section.
    (2) The denominator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product, 
including distilled spirits derived from eligible flavors; and
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by twice the percentage of alcohol by volume of each, divided 
by 100.
    (b) In determining the effective tax rate, quantities of distilled 
spirits, eligible wine, and eligible flavors will be expressed to the 
nearest tenth of a proof gallon. The effective tax rate may be rounded 
to as many decimal places as the proprietor deems appropriate, provided 
that, such rate is expressed no less exactly than the rate rounded to 
the nearest whole cent, and the effective tax rates for all products 
will be consistently expressed to the same number of decimal places. In 
such case, if the number is less than five it will be dropped; if it is 
five or over, a unit will be added.
    (c) The following is an example of the use of the formula.
---------------------------------------------------------------------------

    \1\ Proof gallons by which distilled spirits derived from eligible 
flavors exceed 2\1/2\% of the total proof gallons in the batch (100.9 - 
(2\1/2\%)  x  3.371.8 = 16.6).

                              Batch Record
Distilled spirits.........................  2249.1 proof gallons.
Eligible wine (14% alcohol by volume).....  2265.0 wine gallons
Eligible wine (19% alcohol by volume).....  1020.0 wine gallons
Eligible flavors..........................  100.9 proof gallons


[[Page 41]]

[GRAPHIC] [TIFF OMITTED] TC05OC91.041


(Approved by Office of Management and Budget under control number 1512-
0203)

(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18066, Apr. 30, 1990, as amended by T.D. ATF-307, 
55 FR 52741, Dec 21, 1990]



Sec. 250.80  Deferred payment of tax--release of spirits.

    (a) Action by proprietor. Where the proprietor has furnished bond on 
ATF Form 5110.50, and payment of the tax is to be deferred, he shall 
execute an agreement on ATF Form 5110.51 to pay the amount of tax which 
has been computed and entered on the form. He shall also certify, under 
the penalties of perjury, that he is not in default of any payment of 
tax chargeable against his bond, and that his bond is in the maximum 
penal sum, or that it is sufficient to cover the amount of tax on the 
distilled spirits described on the form in addition to all other amounts 
chargeable agains this bond. The proprietor shall deliver all copies of 
ATF Form 5110.51 and any package gauge record as provided in 
Sec. 250.164a to the revenue agent.
    (b) Action by revenue agent. On receipt of ATF Form 5110.51 and any 
package gauge record, the revenue agent shall verify the computation of 
the tax entered on the ATF Form 5110.51, and if the proprietor has on 
file a good and sufficient bond, ATF Form 5110.50, so indicate on ATF 
Form 5110.51. The revenue agent shall then execute his report of release 
on the ATF Form 5110.51 and release the spirits for shipment to the 
United States. He shall distribute ATF Form 5110.51 and any package 
gauge record according to the instructions of ATF Form 5110.51. Where 
the revenue agent finds that the proprietor does not have good and 
sufficient bond coverage, or where the revenue agent has received 
information that the proprietor is in default of payment of any taxes 
previously charged to his bond, he shall return all copies of ATF Form 
5110.51 and any package gauge record to the proprietor, giving his 
reasons for such action.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8549, Mar. 1, 1985]



Sec. 250.81  Prepayment of tax and release of spirits.

    (a) Action by proprietor. Where the distilled spirits are to be 
released after payment of the computed tax, the proprietor shall enter 
the amount of such computed tax on all copies of ATF Form 5110.51 and 
execute the statement that such tax is being prepaid. The proprietor 
shall then prepare ATF Form 5000.25 in duplicate, and send the original 
with all copies of ATF Form 5110.51 and any package gauge record as 
provided in Sec. 250.164a and the remittance in full for the tax, to the 
Chief, Puerto Rico Operations.
    (b) Action by Chief, Puerto Rico Operations. On receipt of ATF Forms 
5110.51, 5000.25 and any package gauge record, with remittance covering 
prepayment of tax, the Chief, Puerto Rico Operations shall execute the 
receipt on ATF Form 5000.25 and execute the report of prepaid taxes on 
all copies of ATF Form 5110.51. The Chief, Puerto Rico Operations shall 
then retain the originals of ATF Forms 5110.51 and 5000.25 and forward 
the remaining copies of

[[Page 42]]

ATF Form 5110.51 in accordance to the instructions on the form.
    (c) Action by revenue agent. On receipt of ATF Form 5110.51 executed 
by the Chief, Puerto Rico Operations to show receipt of ATF Form 5000.25 
and remittance, the revenue agent shall execute the report of release on 
the ATF Form 5110.51 and release the spirits for shipment to the United 
States. The completed ATF Form 5110.51 shall be distributed according to 
the instructions on the form.

(Approved by the Office of Management and Budget under control number 
1512-0210 and 1512-0497)

[T.D. ATF-277, 53 FR 45267, Nov. 9, 1988]



Sec. 250.82  Permit to ship.

    Distilled spirits may not be shipped to the United States until 
permit for such shipment has been obtained from the Secretary as 
provided in Secs. 250.114 through 250.116.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71711, Dec. 11, 1979]

                      Packages of Distilled Spirits



Sec. 250.86  Authority for shipment.

    Where distilled spirits of Puerto Rican manufacture are to be 
shipped to the United States in containers having a capacity of more 
than one gallon, the laws and regulations of the Commonwealth of Puerto 
Rico require that prior approval for such shipment be obtained from the 
Secretary.

[T.D. 6695, 28 FR 12933, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 250.87  Evidence of taxpayment.

    Where, under the provisions of Sec. 250.86, a person has made 
application to the Secretary for authority to ship distilled spirits of 
Puerto Rican manufacture to the United States in containers having a 
capacity of more than one gallon, he shall, at the same time, submit 
sworn evidence to the Secretary that the distilled spirits tax has been 
paid as provided in Sec. 250.81 or deferred as provided in Sec. 250.80, 
or he shall submit application, ATF Form 5110.51, for permit to pay such 
taxes, as provided in Sec. 250.78. When satisfied that the shipper has 
complied with all provisions of this part relating to the payment of 
taxes on such distilled spirits, the Secretary or his delegate, shall 
note his approval on both copies of the sworn application, and return 
one copy to the shipper. On receipt of the approved application, the 
shipper shall submit application for permit to ship, Form 487B, as 
prescribed in Secs. 250.114 through 250.116.

[T.D. 6695, 28 FR 12933, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71711, Dec. 11, 1979]

                                  Wine



Sec. 250.92  Subject to tax.

    (a) Wine of Puerto Rican manufacture coming into the United States 
and withdrawn for consumption or sale is subject to a tax equal to the 
internal revenue tax imposed in the United States on wine by 26 U.S.C. 
5041.
    (b) The excise taxes collected on wine of Puerto Rican manufacture 
shall be deposited in the Treasury of Puerto Rico only if the sum of the 
cost or value of the materials produced in Puerto Rico, plus the direct 
costs of processing operations performed in Puerto Rico, equals or 
exceeds 50 percent of the value of the wine when it is brought into the 
United States.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652))

[T.D. ATF-206, 50 FR 15888, Apr. 23, 1985]



Sec. 250.93  Application and permit, Form 2900.

    When wine of Puerto Rican manufacture is to be withdrawn for 
shipment to the United States, or for use in an article made with wine 
only or with wine and beer only, for shipment to the United States, 
application for permit to compute the tax on, and to withdraw, the wine 
shall be made on Form 2900, in quintuplicate, by the proprietor of the 
bonded premises where the wine is stored. If the withdrawal is to be 
made in casks, barrels, kegs or similar containers, the proprietor shall 
enter the name of the winemaker producing the wine, the serial numbers 
of the packages, the total number of wine gallons contained therein, and 
the taxable grade of the wine, for example, ``not

[[Page 43]]

more than 14 percent'' if the wine contains not more than 14 percent of 
alcohol by volume, ``14-21 percent'' if the wine contains more than 14 
percent and not exceeding 21 percent of alcohol by volume, ``21-24 
percent'' if the wine contains more than 21 percent but not exceeding 24 
percent of alcohol by volume. If the application covers more than one 
taxable grade of wine, the quantity in each taxable grade shall be 
reported separately. If the withdrawal is to consist of bottled wine, 
the proprietor shall show the number of cases, size of the bottles, the 
number of bottles per case, the total quantity in wine gallons, and the 
taxable grade of the wine in the manner stated above. The proprietor 
shall forward all copies of the form to the Secretary. If the 
application is properly prepared and is otherwise in order, the 
Secretary or his delegate shall execute the permit, retain one copy, and 
return the original and three copies to the proprietor.

[T.D. ATF-62, 44 FR 71712, Dec. 11, 1979, as amended by T.D. ATF-251, 52 
FR 19338, May 22, 1987]



Sec. 250.94  Computation of tax.

    On receipt of permit to compute the tax on Form 2900, the proprietor 
shall compute and enter the amount of the tax on all copies of the form.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 250.95  Deferred payment of tax--release of wine.

    (a) Action by proprietor. Where the proprietor has furnished bond, 
on Form 2897, and payment of the tax is to be deferred, he shall execute 
the agreement on Form 2900 to pay the amount of tax which has been 
computed and entered on the form. He shall also certify under the 
penalties of perjury that he is not in default of any payment of tax 
chargeable against his bond, and that his bond is in the maximum penal 
sum, or that it is sufficient to cover the amount of tax on the wine 
described on the form in addition to all other amounts chargeable 
against his bond. The proprietor shall deliver all copies of Form 2900 
to the revenue agent.
    (b) Action by revenue agent. On receipt of Form 2900, the revenue 
agent shall verify the computation of the tax entered on the form, and 
if the proprietor has on file a good and sufficient bond, Form 2897, so 
indicate on Form 2900. The revenue agent shall then execute his report 
of release on the Form 2900 and release the wine for the purpose 
authorized on the form. The completed form shall be distributed in the 
same manner as provided for ATF Form 5110.51 in Sec. 250.80(b). Where 
the revenue agent finds that the proprietor does not have good and 
sufficient bond coverage, or that the proprietor is in default of 
payment of any taxes previously charged to his bond, he shall return all 
copies of Form 2900 to the proprietor, giving his reasons for such 
action.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71712, Dec. 11, 1979]



Sec. 250.96  Prepayment of tax--release of wine.

    (a) Action by proprietor. Where the wine is to be withdrawn from 
bonded storage after payment of the computed tax, the proprietor shall 
enter the amount of such computed tax on all copies of ATF Form 2900 
(5100.21) and execute the statement that such tax is being prepaid. The 
proprietor shall then prepare ATF Form 5000.25 in duplicate and send the 
original with all copies of ATF Form 2900 (5100.21) and the remittance 
in full for the tax, to the Chief, Puerto Rico Operations.
    (b) Action by Chief, Puerto Rico Operations. On receipt of ATF Forms 
2900 (5100.21) and 5000.25, and remittance covering prepayment of tax, 
the Chief, Puerto Rico Operations shall execute the receipt on ATF Form 
5000.25 and execute the report of prepaid taxes on all copies of ATF 
Form 2900 (5100.21). The Chief, Puerto Rico Operations shall then retain 
the originals of ATF Forms 2900 (5100.21) and 5000.25 and forward the 
remaining copies of ATF Form 2900 (5100.21) in accordance with the 
instructions on the form.
    (c) Action by revenue agent. On receipt of ATF Form 2900 (5100.21) 
executed by the Chief, Puerto Rico Operations to show receipt of ATF 
Form 5000.25 and remittance, the revenue agent shall execute the report 
of release on the

[[Page 44]]

ATF Form 2900 (5100.21) and release the wine for the purpose authorized 
on the form. The completed ATF Form 2900 (5100.21) shall be distributed 
according to the instructions on the form.

(Approved by the Office of Management and Budget under control number 
1512-0149 and 1512-0497)

[T.D. ATF-277, 53 FR 45267, Nov. 9, 1988]



Sec. 250.96a  [Reserved]



Sec. 250.96b  Permit to ship.

    Wine released from bonded storage under Sec. 250.95 or Sec. 250.96 
may not be shipped to the United States until permit for such shipment 
has been obtained from the Secretary as provided in Secs. 250.114 
through 250.116.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 250.97  Marking containers of wine.

    Containers of wine of Puerto Rican manufacture which are to be 
shipped to the United States must be marked with the name of the 
winemaker, the serial number of the container, the kind and taxable 
grade of the wine, the gallon content, and the serial number of the 
withdrawal permit, Form 487B, prefixed by the number of such form, e.g., 
``487B-61-3.''

                                  Beer



Sec. 250.101  Subject to tax.

    (a) Beer of Puerto Rican manufacture coming into the United States 
and withdrawn for consumption or sale is subject to a tax equal to the 
internal revenue tax imposed on beer in the United States by 26 U.S.C. 
5051.
    (b) The excise taxes collected on beer of Puerto Rican manufacture 
shall be deposited in the Treasury of Puerto Rico only if the sum of the 
cost or value of the materials produced in Puerto Rico, plus the direct 
costs of processing operations performed in Puerto Rico, equals or 
exceeds 50 percent of the value of the beer when it is brought into the 
United States.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652))

[T.D. ATF-206, 50 FR 15888, Apr. 23, 1985]



Sec. 250.102  Application and permit, Form 2900.

    When beer of Puerto Rican manufacture is to be withdrawn for 
shipment to the United States, or for use in making an article for 
shipment to the United States, application for permit to compute the tax 
on, and to withdraw, the beer shall be made by the brewer on Form 2900, 
in quintuplicate. If the withdrawal is to be made in hogsheads, barrels, 
or kegs, the brewer shall enter the total number of each size, according 
to capacity, of containers which it is desired to withdraw. If the 
withdrawal is to be made in bottles, the brewer shall enter the number 
of cases, size of bottles, number of bottles per case, the total 
contents thereof in gallons (liquid measure), and the equivalent thereof 
in barrels and fractions of barrels of 31 gallons each. The brewer shall 
forward all copies of the Form 2900 to the Secretary. If the application 
is properly prepared and is otherwise in order, the Secretary or his 
delegate shall execute the permit, retain one copy, and return the 
original and three copies to the brewer.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987]



Sec. 250.103  Computation of tax.

    On receipt of permit to compute the tax on Form 2900 the brewer 
shall compute and enter the amount of the tax on all copies of the form.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 250.104  Deferred payment of tax--release of beer.

    (a) Action by brewer. Where the brewer has furnished bond on Form 
2898, and payment of the tax is to be deferred, he shall execute the 
agreement on Form 2900 to pay the amount of tax which has been computed 
and entered on the form. He shall also certify under the penalties of 
perjury that he is not in default of any payment of tax chargeable 
against his bond, and that his bond is in the maximum penal sum, or that 
it is sufficient to cover the amount of tax on the beer described on the 
form in addition to all other

[[Page 45]]

amounts chargeable against his bond. The brewer shall deliver all copies 
of Form 2900 to the revenue agent.
    (b) Action by revenue agent. On receipt of Form 2900, the revenue 
agent shall verify the computation of the tax entered on the form, and 
if the proprietor has on file a good and sufficient bond, Form 2898, so 
indicate on Form 2900. The revenue agent shall then execute his report 
of release on the Form 2900 and release the beer for the purpose 
authorized on the form. The completed form shall be distributed in the 
same manner as provided for ATF Form 5110.51 in Sec. 250.80(b). Where 
the revenue agent finds that the proprietor does not have good and 
sufficient bond coverage, or that the proprietor is in default of 
payment of any taxes previously charged to his bond, he shall return all 
copies of Form 2900 to the proprietor, giving his reasons for such 
action.

[T.D. 6695, 28 FR 12934, Dec. 5 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71712, Dec. 11, 1979]



Sec. 250.105  Prepayment of tax--release of beer.

    (a) Action by brewer. Where the beer is to be withdrawn from bonded 
storage after payment of the computed tax the brewer shall enter the 
amount of such computed tax on all copies of ATF Form 2900 (5100.21) and 
execute the statement that such tax is being prepaid. The brewer shall 
then prepare ATF Form 5000.25 in duplicate and send the original with 
all copies of ATF Form 2900 (5100.21) and the remittance in full for the 
tax, to the Chief, Puerto Rico Operations.
    (b) Action by Chief, Puerto Rico Operations. On receipt of ATF Forms 
2900 (5100.21) and 5000.25, and remittance covering prepayment of tax, 
the Chief, Puerto Rico Operations shall execute the receipt on ATF Form 
5000.25 and execute the report of prepaid taxes on all copies of ATF 
Form 2900 (5100.21). The Chief, Puerto Rico Operations shall then retain 
the originals of ATF Forms 2900 (5110.21) and 5000.25 and forward the 
remaining copies of ATF Form 2900 (5100.21) in accordance with the 
instructions of the form.
    (c) Action by revenue agent. On receipt of ATF Form 2900 (5100.21) 
executed by the Chief, Puerto Rico Operations to show receipt of ATF 
Form 5000.25 and remittance, the revenue agent shall execute the report 
of release on the ATF Form 2900 (5100.21) and release the beer for the 
purpose authorized on the form. The completed ATF Form 2900 (5100.21) 
shall be distributed according to the instructions on the form.

(Approved by the Office of Management and Budget under control number 
1512-0149 and 1512-0497)

[T.D. ATF-277, 53 FR 45268, Nov. 9, 1988]



Sec. 250.105a  Permit to ship.

    Beer released from bonded storage under Sec. 250.104 or Sec. 250.105 
may not be shipped to the United States until permit for such shipment 
has been obtained from the Secretary as provided in Secs. 250.114 
through 250.116.

[T.D. 6695, 28 FR 12935, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 250.106  Marking containers of beer.

    Containers of beer of Puerto Rican manufacture which are to be 
shipped to the United States must be marked with the name of the brewer; 
the serial number, capacity, and size of the container; the kind of 
beer; and the serial number of the withdrawal permit, Form 487B, 
prefixed by the number of such form, e.g., ``487B-61-3.''

                                Articles



Sec. 250.107  Taxable status.

    Articles of Puerto Rican manufacture which are to be shipped to the 
United States and which are not exempt fom tax under the provisions of 
Sec. 250.36 are subject, under section 7652(a) to a tax equal to the tax 
imposed by the internal revenue laws of the United States. If such 
articles contain distilled spirits, the tax will be collected at the 
rate prescribed by 26 U.S.C. 5001(a)(1) on all alcohol contained 
therein, regardless of the source. Such articles containing only wine 
and/or beer will be taxed at the rates prescribed by 26 U.S.C. 5041 and/
or 5051, respectively. A formula covering the manufacture of each 
article shall

[[Page 46]]

be filed by the manufacturer in accordance with subpart D of this part.

[T.D. ATF-62, 44 FR 71712, Dec. 11, 1979]



Sec. 250.108  Application for permit, ATF Form 5110.51 and/or Form 2900.

    (a) Distilled spirits. Where distilled spirits of Puerto Rican 
manufacture are to be used in the manufacture of the articles to be 
shipped to the United States, the manufacturer shall make application on 
Form 5110.51, in accordance with the applicable provisions of 
Sec. 250.78.
    (b) Wine and/or beer. Where wine and/or beer of Puerto Pican 
manufacture is to be used in the manufacture of the articles to be 
shipped to the United States, the manufacturer shall make application on 
Form 2900, in accordance with the applicable provisions of Secs. 250.93 
and/or 250.102. Wine and beer may be included in the same application.
    (c) Approval of applications. The Secretary, or his delegate, shall 
approve and dispose of the applications in the manner prescribed in 
Secs. 250.78, 250.93, and/or Sec. 250.102, as the case may be.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71712, Dec. 11, 1979]



Sec. 250.109  Taxpayment.

    (a) Distilled spirits. The tax on distilled spirits contained in 
articles to be shipped to the United States, equal to the tax imposed in 
the United States by 26 U.S.C. 5001(a)(1), shall be computed in 
accordance with Sec. 250.79 and paid in accordance with the applicable 
provisions of Secs. 250.80, 250.81, and 250.111 through 250.113.
    (b) Wine. The tax on wine used in the manufacture of articles to be 
shipped to the United States, equal to the tax imposed in the United 
States by 26 U.S.C. 5041, shall be computed in accordance with 
Sec. 250.94 and paid in accordance with the applicable provisions of 
Secs. 250.95, 250.96, and 250.111 through 250.113.
    (c) Beer. The tax on beer used in the manufacture of articles to be 
shipped to the United States, equal to the tax imposed in the United 
States by 26 U.S.C. 5051, shall be computed in accordance with 
Sec. 250.103 and paid in accordance with the applicable provisions of 
Secs. 250.104, 250.105, and 250.111 through 250.113.

[T.D. ATF-62, 44 FR 71712, Dec. 11, 1979]



Sec. 250.110  Release of articles or liquors.

    After determining that the proprietor has good and sufficient bond 
coverage, or, in the case of prepayment, on receipt of ATF Form 5110.51 
or Form 2900 executed by the Chief, Puerto Rico Operations to show 
receipt of ATF Form 5000.25, and remittance, the revenue agent shall 
execute his report of release on ATF Form 5110.51 or Form 2900 and 
release the articles containing distilled spirits, or release the wine 
and/or beer for use in the manufacture of articles. He shall forward one 
copy of ATF Form 5110.51 or Form 2900, and any package gauge record as 
provided in Sec. 250.164a, to the Bureau of Alcoholic Beverage Taxes and 
one copy of each to the District Revenue Agent (Commonwealth of Puerto 
Rico), deliver one copy of each to the applicant, and retain one copy. A 
permit shall be obtained as provided in Secs. 250.114 through 250.116 
before the articles manufactured from such liquors may be shipped to the 
United States.

(Approved by the Office of Management and Budget under control number 
1512-0497)

[T.D. ATF-198, 50 FR 8550, Mar. 1, 1985, as amended by T.D. ATF-251, 52 
FR 19338, May 22, 1987; T.D. ATF-277, 53 FR 45268, Nov. 9, 1988]

                        Payment of Tax by Return



Sec. 250.111  General.

    All taxes imposed by 26 U.S.C. 7652(a), and which, under the 
provisions of this part, are paid in Puerto Rico, shall be paid and 
collected on the basis of a tax return as provided in this subpart. Any 
tax which has been paid in accordance with the provisions of this part 
in effect at the time of such payment, and before provision was made in 
the part for payment of such tax by return, shall be deemed to have been 
prepaid as prescribed in this part.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55852, Sept. 28, 1979; T.D. 
ATF-277, 53 FR 45268, Nov. 9, 1988]

[[Page 47]]



Sec. 250.112  Returns for semimonthly periods.

    (a) Returns. The taxes imposed by 26 U.S.C. 7652(a), (equal to the 
taxes imposed in the United States by 26 U.S.C. 5001(a)(1), 5041, or 
5051), the payment of which has been deferred under the provisions of 
Secs. 250.80, 250.95 or 250.104 of this part, shall be paid pursuant to 
a return on ATF Form 5000.25 prepared in accordance with the 
instructions on the form.
    (b) Periods. Except as provided for in paragraph (d) of this 
section, the periods to be covered by returns on ATF Form 5000.24 shall 
be semimonthly; such periods to run from the 1st day through the 15th 
day of each month and from the 16th day through the last day of each 
month.
    (c) Filing. (1) The original of ATF Form 5000.25, with remittance 
covering the full amount of the tax, shall be filed with the Chief, 
Puerto Rico Operations not later than the 14th day after the last day of 
the return period except as provided by paragraph (d) of this section. 
If the due date falls on a Saturday, Sunday, or legal holiday, the 
return and remittance shall be due on the immediately preceding day 
which is not a Saturday, Sunday, or legal holiday, except as provided by 
paragraph (d) of this section.
    (2) The tax shall be paid in full by remittance at the time the 
return is filed, unless the proprietor is required to make remittances 
by electronic fund transfer in accordance with Sec. 250.112a.
    (3) The remittance may be in any form the Chief, Puerto Rico 
Operations, is authorized to accept under the provisions of Sec. 70.61 
of this chapter (Payment by check or money order) and which is 
acceptable to the Chief, Puerto Rico Operations. A remittance by check 
or money order, shall be made payable to the ``Bureau of Alcohol, 
Tobacco and Firearms.''
    (4) When the return and remittance are delivered by U.S. mail to the 
office of the Chief, Puerto Rico Operations, the date of the official 
postmark of the U.S. Postal Service stamped on the cover in which the 
return and remittance were mailed shall be treated as the date of 
delivery.
    (d) Special rule for taxes due for the month of September (effective 
after December 31, 1994). (1) The second semimonthly period for the 
month of September shall be divided into two payment periods, from the 
16th day through the 26th day, and from the 27th day through the 30th 
day. The taxpayer shall file a return on Form 5000.24, and make 
remittance, for the period September 16-26, no later than September 29. 
The taxpayer shall file a return on Form 5000.24, and make remittance, 
for the period September 27-30, no later than October 14.
    (2) Taxpayment not by electronic fund transfer. In the case of taxes 
not required to be remitted by electronic fund transfer as prescribed by 
Sec. 250.112a, the second semimonthly period of September shall be 
divided into two payment periods, from the 16th day through the 25th 
day, and the 26th day through the 30th day. The taxpayer shall file a 
return on Form 5000.24, and make remittance, for the period September 
16-25, no later than September 28. The taxpayer shall file a return on 
Form 5000.24, and make remittance, for the period September 26-30, no 
later than October 14.
    (3) Amount of payment: Safe harbor rule. (i) Taxpayers are 
considered to have met the requirements of paragraph (d)(1) of this 
section, if the amount paid no later than September 29 is not less than 
11/15 (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (ii) Taxpayers are considered to have met the requirements of 
paragraph (d)(2) of this section, if the amount paid no later than 
September 28 is not less than 2/3rds (66.7 percent) of the tax liability 
incurred for the semimonthly period beginning on September 1 and ending 
on September 15, and if any underpayment of tax is paid by October 14.
    (4) Last day for payment. If the required due date for taxpayment 
for the periods September 16-25 or September 16-26 as applicable, falls 
on a Saturday or legal holiday, the return and remittance shall be due 
on the immediately preceding day. If the required due date

[[Page 48]]

falls on a Sunday, the return and remittance shall be due on the 
immediately following day.
    (e) Default. Where a taxpayer has defaulted in any payment of tax 
under this section, during the period of such default and until the 
regional director (compliance) finds that the revenue will not be 
jeopardized by deferred payment of tax under this section, the tax shall 
be prepaid by such taxpayer in accordance with the provisions of 
Sec. 250.113. During such period, distilled spirits, wine, or beer shall 
not be released from the proprietor's bonded premises before the 
proprietor has paid the tax thereon. In the event of default, the Chief, 
Puerto Rico Operations shall immediately notify the Secretary and the 
revenue agent at the premises that tax is to be prepaid until further 
notice, and upon a finding that the revenue will not be jeopardized by 
resumption of deferred payment or tax under this section, the Chief, 
Puerto Rico Operations shall notify the Secretary and the revenue agent 
that deferred payment may be resumed.

(Approved by the Office of Management and Budget under control number 
1512-0497)

(Aug. 16, 1954, Ch. 736, 68A Stat. 775, (26 U.S.C. 6301); June 29, 1956, 
Ch. 462, 70 Stat. 391 (26 U.S.C. 6301))

[T.D. ATF-277, 53 FR 45268, Nov. 9, 1988, as amended by T.D. ATF-301, 55 
FR 47658, Nov. 14, 1990; T.D. ATF-365, 60 FR 33674, June 28, 1995]



Sec. 250.112a  Payment of tax by electronic fund transfer.

    (a) General. (1) Each taxpayer who was liable, during a calendar 
year, for a gross amount equal to or exceeding five million dollars in 
distilled spirits taxes combining tax liabilities incurred under this 
part and parts 19 and 251 of this chapter, a gross amount equal to or 
exceeding five million dollars in wine taxes combining tax liabilities 
incurred under this part and parts 240 and 251 of this chapter, or a 
gross amount equal to or exceeding five million dollars in beer taxes 
combining tax liabilities incurred under this part and parts 25 and 251 
of this chapter, shall use a commercial bank in making payment by 
electronic fund transfer (EFT) of such taxes during the succeeding 
calendar year. Payment by cash, check, or money order, of distilled 
spirits taxes, wine taxes, or beer taxes, as described in Sec. 250.112, 
is not authorized for a taxpayer who is required, by this section, to 
make remittances by EFT. For purposes of this section, the dollar amount 
of tax liability is to be summarized separately for distilled spirits 
taxes, wine taxes, or beer taxes, and is defined as the gross tax 
liability on each type of product for which taxes are paid in accordance 
with this subpart, taxable withdrawals from premises in the United 
States, and importation during the calendar year, without regard to any 
drawbacks, credits, or refunds, for all premises at which tax 
liabilities are incurred by the taxpayer. Overpayments are not taken 
into account in summarizing the gross tax liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (3) A taxpayer who is required by this section to make remittances 
by EFT, shall make a separate EFT remittance and file a separate tax 
return, for each premises from which distilled spirits, wine, or beer is 
withdrawn upon determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the tax by EFT, each taxpayer 
who was liable for a gross amount equal to or exceeding five million 
dollars in distilled spirits taxes combining tax liabilities incurred 
under this part and parts 19 and 251 of this chapter, a gross amount

[[Page 49]]

equal to or exceeding five million dollars in wine taxes combining tax 
liabilities incurred under this part and parts 240 and 251 of this 
chapter, or a gross amount equal to or exceeding five million dollars in 
beer taxes combining tax liabilities incurred under this part and parts 
245 and 251 of this chapter during the previous calendar year, shall 
notify, in writing, the regional director (compliance), for each region 
in which taxes are paid. The notice shall be an agreement to make 
remittances by EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the taxpayment to the Treasury Account as provided in 
paragraph (e) of this section. The request shall be made to the bank 
early enough for the transfer to be made to the Treasury Account by no 
later than the close of business on the last day for filing the return, 
prescribed in Sec. 250.112 or Sec. 250.113. The request shall take into 
account any time limit established by the bank.
    (3) If a taxpayer was liable for less than five million dollars in 
distilled spirits taxes combining tax liabilities incurred under this 
part and parts 19 and 251 of this chapter, less than five million 
dollars in wine taxes combining tax liabilities incurred under this part 
and parts 240 and 251 of this chapter, or less than five million dollars 
in beer taxes combining tax liabilities incurred under this part and 
parts 245 and 251 of this chapter during the preceding calendar year, 
the taxpayer may choose either to continue remitting the tax as provided 
in this section or to remit the tax with the return as prescribed by 
Sec. 250.112. Upon filing the first return on which the taxpayer chooses 
to discontinue remitting the tax by EFT and to begin remitting the tax 
with the tax return, the taxpayer shall notify the regional director 
(compliance) by attaching a written notification to the tax return, 
stating that no taxes are due by EFT, because the tax liability during 
the preceding calendar year was less than five million dollars, and that 
the remittance shall be filed with the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the tax return, 
information about remitting the tax for that return by EFT and shall 
file the return with the Chief, Puerto Rico Operations.
    (2) Remittances shall be considered as made when the taxpayment by 
electronic fund transfer is received by the Treasury Account. For 
purposes of this section, a taxpayment by electronic fund transfer shall 
be considered as received by the Treasury Account when it is paid to a 
Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an electronic fund 
transfer message as required by paragraph (b)(2) of this section, any 
transfer data record furnished to the taxpayer, through normal banking 
procedures, will serve as the record of payment, and shall be retained 
as part of required records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5684, 6651, or 6656, as applicable, for 
failure to make a taxpayment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the regional director (compliance) will issue to the 
taxpayer an ATF Procedure entitled, Payment of Tax by Electronic Fund 
Transfer. This publication outlines the procedure a taxpayer is to 
follow when preparing returns and EFT remittances in accordance with 
this part. The U.S. Customs Service will provide the taxpayer with 
instructions for preparing EFT remittances for payments to be made to 
the U.S. Customs Service.

(Approved by the Office of Management and Budget under control number 
1512-0457)

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-185, 49 FR 37580, Sept. 25, 1984, as amended by T.D. ATF-245, 
52 FR 532, Jan. 7, 1987; T.D. ATF-251, 52 FR 19339, May 22, 1987; T.D. 
ATF-262, 52 FR 47560, Dec. 15, 1987; T.D. ATF-277, 53 FR 45268, Nov. 9, 
1988]



Sec. 250.113  Returns for prepayment of taxes.

    (a) General. If a proprietor does not have on file with the Chief, 
Puerto Rico Operations an approved bond covering the deferred payment of 
taxes, or if such bond is in an insufficient penal

[[Page 50]]

sum, or if there is default by him in any payment of tax under this 
subpart, liquors shall not be released from bonded storage before the 
proprietor has paid the tax thereon.
    (b) Remittances. Remittances submitted to cover prepayment of taxes 
under this subpart shall be in cash, United States postal money orders, 
certified checks, or cashier's checks.
    (c) Distilled spirits. In all cases where taxes equal to the taxes 
imposed in the United States by 26 U.S.C. 5001(a)(1) are to be paid 
before distilled spirits may be released for shipment, the proprietor 
shall pay such taxes pursuant to a return on ATF Form 5000.25, as 
prescribed in Sec. 250.81.
    (d) Wine. In all cases where taxes equal to the taxes imposed in the 
United States by 26 U.S.C. 5041, are to be paid before wine may be 
withdrawn from bonded storage, the proprietor shall pay such taxes 
pursuant to a return on ATF Form 5000.25, and as prescribed in 
Sec. 250.96.
    (e) Beer. In all cases where taxes equal to the taxes imposed in the 
United States by 26 U.S.C. 5051, are to be paid before beer may be 
withdrawn from bonded storage, the brewer shall pay such taxes pursuant 
to a return on ATF Form 5000.25, and as prescribed in Sec. 250.105.
    (f) Applicable procedures. The procedures of Sec. 250.112(c) with 
respect to returns delivered by United States mail shall apply to 
returns and remittances filed under the provisions of this section.

(Approved by the Office of Management and Budget under control number 
1512-0497)

[20 FR 6077, Aug. 20, 1955 as amended by T.D. 6821, 30 FR 6217, May 4, 
1965. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 250.113, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

                   Permit to Ship Liquors and Articles



Sec. 250.114  Permit to ship required.

    Before liquors and articles of Puerto Rican manufacture, upon which 
all internal revenue taxes have been paid or deferred as prescribed in 
this subpart, may be shipped to the United States, a permit to ship, 
Form 487B, must be obtained from the Secretary as provided in 
Secs. 250.115 and 250.116.



Sec. 250.115  Application, Form 487B.

    Application for permit to ship to the United States liquors and 
articles of Puerto Rican manufacture on which all taxes have been paid 
or deferred as prescribed in this subpart shall be made by the shipper 
on Form 487B, in sextuple. Each Form 487B will be given a serial number, 
by the applicant, beginning with ``1'' for the first day of January of 
each year and running consecutively thereafter to December 31, 
inclusive. This serial number will be prefixed by the last two digits of 
the calendar year, e.g. ``61-1.'' All copies of the form shall be 
delivered to the revenue agent for execution of his certification 
thereon and forwarding of all copies to the Secretary within sufficient 
time to allow for the issuance of the permit and customs inspection as 
provided in Sec. 250.116.



Sec. 250.116  Issuance of permit, Form 487B, and customs inspection.

    If the application has been properly executed and the Secretary, or 
his delegate, finds that all internal revenue taxes imposed under 26 
U.S.C. 7652(a), have been computed under the provisions of this part and 
have been paid or, pursuant to a sufficient bond, have been deferred 
under the applicable provisions of this part, he will execute his permit 
on all copies thereof, retain one copy of the form, return two copies to 
the shipper, and send three copies to the district director of customs 
in Puerto Rico. The shipper will submit the two copies of the Form 487B 
to the district director of customs at least six hours prior to the 
intended lading of the merchandise. The district director of customs 
will then inspect the merchandise covered by the Form 487B after which 
he will execute his certificate on each copy of Form 487B indicating all 
exceptions. If discrepancies appear indicating differences between the 
quantity covered by Form 487B and the quantity actually contained in the 
shipment or the improper tax payment of the merchandise, he will 
withhold release of the shipment and notify the

[[Page 51]]

Secretary of such discrepancies. Thereupon, such discrepancies must be 
corrected in the shipping documents and additional tax paid, if 
required, prior to release of the merchandise. The district director of 
customs, upon release of the merchandise for shipment, will retain one 
copy of the Form 487B, return two copies to the shipper, and send two 
copies to the district director of customs at the port of arrival in the 
United States, one of which should be mailed and the other dispatched on 
the vessel concerned for the guidance of the ATF officer who will handle 
the cargo. After the shipment has been cleared by the district director 
of customs in Puerto Rico, the shipper shall retain one copy of the Form 
487B and send one copy thereof, with other shipping documents, to the 
district director of customs at the port of arrival.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 250.116, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

                      Procedure at Port of Arrival



Sec. 250.117  Action by carrier.

    The carrier of the merchandise specified on the Form 487B shall, at 
the time of unlading at the port of arrival in the United States, 
segregate and arrange the cases of liquors or articles for convenient 
customs examination and will assume any expense incurred in connection 
therewith.



Sec. 250.118  Inspection by district director of customs at port of arrival.

    On receipt of properly executed Form 487B from the shipper and the 
copies of Form 487B from the district director of customs in Puerto 
Rico, the district director of customs at the port of arrival shall 
inspect the merchandise to determine whether the quantity specified on 
the Form 487B is contained in the shipment. He will then execute his 
certificate on each copy of Form 487B received and indicate thereon any 
exceptions found at the time of discharge. The statement of exceptions 
should show the serial number of each case or other shipping container 
which sustained a loss, the quantity of liquor reported shipped in such 
container and the quantity lost. Losses occurring as the result of 
missing bottles, cases, or other containers should be listed separately 
from empty containers and containers which have sustained losses due to 
breakage. Where the statement is made on the basis of bottles missing or 
lost due to other cause, the number and size of bottles lost should be 
shown. If the director finds that the full amount of the taxes due has 
not been paid, he will require the difference due to be paid prior to 
release of the merchandise in accordance with the applicable provisions 
of this part. When the proper inspection of the merchandise has been 
effected, and any additional taxes found to be due on the liquors or 
articles collected, the merchandise will be released.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 250.119  Disposition of forms by district director of customs.

    Two copies of the Form 487B will be forwarded to the Chief, Puerto 
Rico Operations, and one copy of the form will be retained by the 
district director of customs and be available for inspection by ATF 
officers. If the taxpayer files a claim for refund of tax on losses, the 
Chief, Puerto Rico Operations will forward to the regional director 
(compliance) of the region in which the port of arrival is located a 
copy of the completed Form 487B with the claim for refund.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by 
T.D. ATF-251, 52 FR 19339, May 22, 1987]



  Subpart F--Liquors and Articles Purchased by Tourists in Puerto Rico



Sec. 250.125  Taxable.

    When liquors and articles subject to tax are brought into the United 
States by tourists, the tax thereon shall be paid as provided in this 
subpart.

[[Page 52]]



Sec. 250.126  Taxpayment in Puerto Rico.

    Liquors upon which all Federal internal revenue taxes have been paid 
in Puerto Rico may be brought into the United States for personal 
consumption without payment of additional taxes. When distilled spirits, 
wines, or beer are purchased by a tourist for consumption in the United 
States, the internal revenue tax due may be paid to the Chief, Puerto 
Rico Operations, and an ATF receipt obtained, or the tax may be paid to 
the U.S. Customs authorities, who will issue a customs receipt. The tax 
on articles purchased by tourists may be paid in the same manner. The 
receipt received from the Chief, Puerto Rico Operations or from the 
customs officer shall be presented, as required, as evidence that the 
tax has been paid.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1358, as amended 
(26 U.S.C. 5061, 5205))

[T.D. ATF-206, 50 FR 23954, June 7, 1985, as amended by T.D. ATF-251, 52 
FR 19339, May 22, 1987]



Sec. 250.128  Taxpayment at port of arrival.

    If the internal revenue tax on liquors and articles is not paid in 
Puerto Rico, it shall be paid by the tourist at the port of arrival 
prior to release of the liquors or articles from customs custody. The 
tax may be paid to the regional director (compliance), and an ATF 
receipt obtained, or the tax may be paid to the director of customs, who 
will issue a customs receipt. If payment is to be made to the regional 
director (compliance), the director of customs will notify the region of 
the amount of tax due. On payment of the tax to the director of customs, 
or on submission of the ATF receipt for the tax, the director of customs 
will release the liquors or articles.

[T.D. ATF-251, 52 FR 19339, May 22, 1987]



       Subpart G--Closures for Distilled Spirits From Puerto Rico



Sec. 250.135  Containers of distilled spirits to bear closures.

    Containers of 1 gallon (3.785 liters) or less of distilled spirits, 
upon which all Federal internal revenue taxes have been paid or deferred 
in Puerto Rico under provisions of this part, shall have closures or 
other devices affixed in accordance with the provisions of this part, 
prior to shipment to the United States.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23954, June 7, 1985]



Sec. 250.136  Affixing closures.

    Closures or other devices shall be securely affixed to containers 
having capacity of 1 gallon (3.785 liters) or less so as to leave a 
portion remaining on the container when it is opened. In addition, the 
closures or other devices shall be constructed in such a manner as to 
require that they be broken to gain access to the contents of the 
containers.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23954, June 7, 1985]



       Subpart H--Records and Reports of Liquors From Puerto Rico



Sec. 250.163  General requirements.

    Except as provided in Sec. 250.164, every person, other than a 
tourist, bringing liquor into the United States from Puerto Rico shall 
keep records and render reports of the physical receipt and disposition 
of such liquors in accordance with part 194 (``Liquor Dealers'') of this 
chapter: Provided, That if the person who is responsible for release of 
the liquors from customs custody does not take physical possession of 
the liquors, he shall keep commercial records reflecting such release; 
such records shall identify the kind and quantity of the liquors 
released, the name and address of the person receiving the liquors from 
customs custody, and shall be filed chronologically by release dates. 
Records and reports will not be required under this part with respect of 
liquors while in customs custody.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(72 Stat. 1342, 1395; 26 U.S.C. 5114, 5555)

[T.D. ATF-2, 37 FR 22736, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984]

[[Page 53]]



Sec. 250.164  Proprietors of taxpaid premises.

    Transactions involving the bringing of liquors into the United 
States from Puerto Rico by proprietors of distilled spirits plants in 
the United States qualified under the provisions of this chapter shall 
be recorded and reported in accordance with the regulations governing 
the operations of such premises in the United States.

[T.D. 6402, 24 FR 6090, July 30, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-198, 50 FR 8551, Mar. 1, 1985]



Sec. 250.164a  Package gauge record.

    When required in this part, with respect to Puerto Rican spirits, a 
package gauge record shall be prepared to show:
    (a) The date prepared;
    (b) The related transaction form and its serial number;
    (c) The producer or rectifier (processor) of the spirits, and his 
name, address, and plant registration number; and
    (d) For each package, the:
    (1) Package identification or serial number;
    (2) Kind of spirits;
    (3) Gross weight;
    (4) Tare;
    (5) Net weight;
    (6) Proof gallons; and
    (7) Proof.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8551, Mar. 1, 1985]



Sec. 250.165  Certificate of effective tax rate computation.

    (a) Where distilled spirits of Puerto Rican manufacture which 
contain eligible wine or eligible flavors are to be tax determined for 
shipment to the United States or are to be shipped to the United States 
without payment of tax for transfer from customs custody to ATF bond, 
the consignor shall prepare a certificate of effective tax rate 
computation showing the:
    (1) The serial number of ATF Form 5110.31 or 5110.51;
    (2) Elements necessary to compute the effective tax rate in 
accordance with Sec. 250.79a as follows--
    (i) Proof gallons of distilled spirits (exclusive of distilled 
spirits derived from eligible flavors);
    (ii) Wine gallons of each eligible wine and the percentage of 
alcohol by volume of each; and
    (iii) Proof gallons of distilled spirits derived from each eligible 
flavor;
    (3) Date of the statement of eligibility for each eligible flavor 
(see Sec. 250.50a).
    (4) Effective tax rate applied to the product.
    (5) Signature and title of the consignor.
    (b) If the spirits are tax determined for shipment to the United 
States, the proprietor shall retain the certificate for a period of not 
less than three years after the last tax determination to which the 
certificate is applicable. If the spirits are shipped to the United 
States for transfer from Customs custody to the bonded premises of a 
distilled spirits plant, the proprietor shall forward the original to 
the consignee distilled spirits plant in the United States and retain a 
copy for his files.

(Approved by Office of Management and Budget under control number 1512-
0203)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1366, as amended (26 U.S.C. 5232); 
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18067, Apr. 30, 1990]



  Subpart I--Claims for Drawback on Eligible Articles From Puerto Rico

    Source: T.D. ATF-263, 52 FR 46594, Dec. 9, 1987, unless otherwise 
noted.



Sec. 250.170  Drawback of tax.

    Any person who brings eligible articles into the United States from 
Puerto Rico may claim drawback of the distilled spirits excise taxes 
paid on such articles as provided in this subpart.



Sec. 250.171  Special tax.

    Any person filing claim for drawback of tax on eligible articles 
brought into the United States from Puerto Rico shall pay special tax as 
required by 26 U.S.C. 5131. For purposes of special tax, subparts C and 
D of part 17 of this chapter shall apply as if the use and tax 
determination occurred in the

[[Page 54]]

United States at the time the article was brought into the United States 
and, each business location from which entry of eligible articles is 
caused or effected shall be treated as a place of manufacture. If 
special tax is paid for any such business location under part 197 of 
this chapter, as a place where nonbeverage products are manufactured for 
purposes of drawback, then no additional special tax need be paid for 
that location under this section.

[T.D. ATF-263, 52 FR 46594, Dec. 9, 1987, as amended by T.D. ATF-271, 53 
FR 17559, May 17, 1988; T.D. ATF-379, 61 FR 31427, June 20, 1996]



Sec. 250.172  Bonds.

    (a) General. Persons bringing eligible articles into the United 
States from Puerto Rico and intending to file monthly claims for 
drawback under the provisions of this subpart shall obtain a bond on 
Form 5154.3. When the limit of liability under a bond given in less than 
the maximum amount has been reached, further drawback on monthly claims 
may be suspended until a strengthening or superseding bond in a 
sufficient amount has been furnished. For provisions relating to bonding 
requirements, subpart E of part 17 of this chapter is incorporated in 
this part, but references therein to a regional director (compliance) 
shall apply, for purposes of this part, to the Chief, Puerto Rico 
Operations.
    (b) Approval required. No person bringing eligible articles into the 
United States from Puerto Rico may file monthly claims for drawback 
under the provisions of this subpart until bond on Form 5154.3 has been 
approved by the Chief, Puerto Rico Operations. Bonds approved by a 
regional director (compliance) prior to the effective date of this 
provision shall remain in effect.

[T.D. ATF-379, 61 FR 31427, June 20, 1996]



Sec. 250.173  Claims for drawback.

    (a) General. Persons bringing eligible articles into the United 
States from Puerto Rico shall file claim for drawback on Form 2635 
(5620.8) with the Chief, Puerto Rico Operations. Upon finding that the 
claimant has satisfied the requirements of this subpart, the regional 
director (compliance) shall allow the drawback of taxes at a rate of $1 
less than the lesser of $10.50 a proof gallon or the rate specified in 
26 U.S.C. 5001(a).
    (b) Information on claims. The claim must set forth the following:
    (1) That the special tax has been paid;
    (2) That the eligible articles brought into the United States on 
which drawback is claimed are fully tax paid or tax-determined;
    (3) That the eligible articles on which drawback is claimed are 
nonbeverage products; and
    (4) That the eligible articles were manufactured in Puerto Rico in 
compliance with an approved formula in accordance with Sec. 250.51.
    (c) Supporting data. Each claim shall be accompanied by supporting 
data as specified in this paragraph. ATF Form 5154.2, Supporting Data 
for Nonbeverage Drawback Claims, may be used, or the claimant may use 
any suitable format that provides the following information:
    (1) The control number of the Special Tax Stamp and the tax year for 
which issued;
    (2) A description of each eligible article as follows:
    (i) Name and type of each product;
    (ii) Name and address of the manufacturer of each product;
    (iii) Formula number;
    (iv) Alcohol content of each product;
    (v) Quantity of each product;
    (vi) Proof gallons of distilled spirits contained in each product;
    (vii) Date of entry of the eligible product into the United States, 
and
    (viii) The serial number of each ATF Form 487-B (5170.7) covering 
such articles shipped to the United States.
    (d) Date of filing claim. Quarterly claims for drawback shall be 
filed with the Chief, Puerto Rico Operations, within the 6 months next 
succeeding the quarter in which the eligible products covered by the 
claim were brought into the United States. Monthly claims for drawback 
may be filed at any time after the end of the month in which the 
eligible products covered by the claim were brought into the United 
States, but must be filed not later than the close of the sixth month 
succeeding the

[[Page 55]]

quarter in which the eligible products were brought into the United 
States.

(Approved by the Office of Management and Budget under control number 
1512-0494)

[T.D. ATF-263, 52 FR 46594, Dec. 9, 1987, as amended by T.D. ATF-271, 53 
FR 17559, May 17, 1988; T.D. ATF-379, 61 FR 31427, June 20, 1996]



Sec. 250.174  Records.

    (a) General. Every person intending to file claim for drawback on 
eligible articles brought into the United States from Puerto Rico shall 
keep permanent records of the data elements required by this section. 
Such records shall be maintained at the business premises for which the 
claim is filed and shall be available for inspection by any ATF officer 
during business hours.
    (b) Details of records. Each person intending to claim drawback on 
eligible articles brought into the United States shall maintain 
permanent records showing the following data:
    (1) The name, description, quantity, and formula number of each such 
article.
    (2) The alcohol content of each such article.
    (3) Name and address of the manufacturer and shipper, and date of 
entry into the United States.
    (4) Evidence of taxpayment of distilled spirits in accordance with 
paragraph (c) of this section.
    (c) Evidence of taxpayment of distilled spirits. All shipments of 
eligible articles from Puerto Rico to the United States shall be 
supported by the vendor's commercial invoice which must bear a 
certification as to taxpayment by the person who determined or paid the 
tax, and include the following information:
    (1) The name and address of vendor;
    (2) The number of the applicable invoice;
    (3) The serial or package identification number of the container;
    (4) Name, type, and formula number of the product;
    (5) The kind of spirits, proof, and proof gallons in the container; 
and
    (6) The serial number of each Form 487-B (5170.7) covering such 
articles shipped to the United States.
    (d) Form of record. No particular form of record is prescribed, but 
the data required to be shown shall be readily ascertainable from the 
records kept by the drawback claimant.
    (e) Retention of records. Each drawback claimant shall retain for a 
period of not less than three years all records required by this 
subpart, all commercial invoices or shipping documents, and all bills of 
lading received evidencing receipt and tax determination of the spirits. 
In addition, a copy of each approved formula returned to the 
manufacturer of eligible articles shall be retained for not less than 
three years from the date he files his last claim for drawback under the 
formula. The records, forms, and formulas shall be readily available 
during regular business hours for examination by ATF officers.

(Approved by the Office of Management and Budget under control number 
1512-0494)



    Subpart Ia--Shipment of Denatured Spirits and Products Made With 
         Denatured Spirits to the United States From Puerto Rico

    Source: T.D. ATF-199, 50 FR 9198, Mar. 1, 1985, unless otherwise 
noted.



Sec. 250.191  Notice of shipment.

    At least 5 business days before shipment, each proprietor of a 
distilled spirits plant in Puerto Rico who intends to ship denatured 
spirits to the United States in containers larger than 5 gallons, and 
each person in Puerto Rico who intends to ship products made with 
denatured spirits to the United States in containers larger than 5 
gallons shall notify the chemist of the Treasury of Puerto Rico of the 
intent to ship.

(Approved by the Office of Management and Budget under control number 
1512-0336)

[T.D. ATF-199, 50 FR 9198, Mar. 1, 1985, T.D. ATF-199, 50 FR 20099, May 
14, 1985]



Sec. 250.192  Samples and analysis.

    The chemist of the Treasury of Puerto Rico may take samples of the 
product to be shipped in order to determine that it is eligible for tax-
free status.

[[Page 56]]



Sec. 250.193  Notification of tax liability.

    (a) If the chemist of the Treasury of Puerto Rico finds that 
denatured spirits or products made with denatured spirits are not 
eligible for tax-free shipment, before the shipment is made, the chemist 
will immediately notify the shipper that the article is subject to tax, 
payable in accordance with Secs. 250.107 through 250.110.
    (b) If the chemist of the Treasury of Puerto Rico finds that 
denatured spirits or products made with denatured spirits are not 
eligible for tax-free shipment, after the shipment is made, the chemist 
will immediately notify the shipper that the tax shall be paid 
immediately in accordance with Sec. 250.113. The chemist will also 
notify the regional director (compliance) of the consignee's region.



Sec. 250.194  Detention of articles.

    (a) Upon receiving a notification in accordance with 
Sec. 250.193(b), the regional director (compliance) will detain the 
article in accordance with part 20 of this chapter or seize the article 
in accordance with part 72 of this chapter.
    (b) After the shipper furnishes proof that the tax was paid in 
accordance with Sec. 250.113, the regional director (compliance) will 
release the article to the consignee.



Subpart Ib--Shipment of Bulk Distilled Spirits From Puerto Rico, Without 
 Payment of Tax, for Transfer From Customs Custody to Internal Revenue 
                                  Bond

    Authority: Sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended (26 
U.S.C. 5232).

    Source: T.D. ATF-62, 44 FR 71714, Dec. 11, 1979, unless otherwise 
noted.



Sec. 250.196  General.

    Under the provisions of this subpart and Sec. 250.86, distilled 
spirits brought into the United States from Puerto Rico in bulk 
containers may be withdrawn by the proprietor of a distilled spirits 
plant from customs custody and transferred in such bulk containers or by 
pipeline to the bonded premises of his plant, without payment of the 
internal revenue tax, if any, imposed on such spirits by 26 U.S.C. 7652. 
Such spirits so withdrawn and transferred to a distilled spirits plant 
(a) may be redistilled or denatured only if of 185 degrees or more of 
proof; and (b) may be withdrawn from internal revenue bond for any 
purpose authorized by 26 U.S.C. chapter 51, in the same manner as 
domestic distilled spirits. Spirits transferred from customs custody to 
the bonded premises of a distilled spirits plant under the provisions of 
this subpart shall be received and stored thereat, and withdrawn or 
transferred therefrom, subject to applicable provisions of part 19 of 
this chapter. The person operating the bonded premises of the distilled 
spirits plant to which spirits are transferred under the provisions of 
this subpart shall become liable for the tax on distilled spirits 
withdrawn from customs custody under 26 U.S.C. 5232, upon release of the 
spirits from customs custody and the person bringing the spirits into 
the United States shall thereupon be relieved of liability for the tax.



Sec. 250.197  Furnishing formula to consignee.

    Prior to the first shipment, the person shipping the spirits to the 
United States shall furnish a reproduced copy of the approved formula 
covering such spirits to the regional director (compliance) of each 
region in which a consignee's distilled spirits plant is located, and to 
the proprietor of each distilled spirits plant to receive the spirits.

(Approved by the Office of Management and Budget under control number 
1512-0204)

[T.D. ATF-198, 50 FR 8551, Mar. 1, 1985]



Sec. 250.198  [Reserved]



Sec. 250.199  Application and permit to ship, ATF Form 5110.31.

    Before spirits of Puerto Rican manufacture may be shipped to the 
United States without payment of tax for withdrawal from customs custody 
and transfer to internal revenue bond, an application by the consignor 
on ATF Form 5110.31 for permit to ship must be approved by the 
Secretary. All copies of the application (original and five

[[Page 57]]

copies) shall be delivered to the revenue agent.



Sec. 250.199a  Action by revenue agent.

    (a) Gauge. Puerto Rican spirits to be withdrawn for shipment to the 
United States as provided in this subpart shall be gauged by the revenue 
agent prior to withdrawal from the consignor premises. The revenue agent 
shall record the quantity and proof of the spirits gauged on ATF Form 
5110.31. If the spirits are in packages, the revenue agent shall prepare 
in sextuplicate a package gauge record according to Sec. 250.164a, 
attach the package gauge record to ATF Form 5110.31, and dispose of the 
form (and any attachments) according to the instructions thereon.
    (b) Sealing bulk conveyances. When a shipment is made in a tank, 
van, or other bulk conveyance (other than barrels, drums, or similar 
packages that are not containerized), all openings affording access to 
the spirits shall be sealed by the Puerto Rican revenue agent is such 
manner as will prevent unauthorized removal of spirits without 
detection.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8551, Mar. 1, 1985]



Sec. 250.199b  Issuance and disposition of permit.

    When the Secretary receives an application on ATF Form 5110.31 and 
he finds that the applicant is in compliance with law and regulations, 
he will execute the permit to ship on all copies of ATF Form 5110.31, 
retain one copy, and any accompanying package gauge record as provided 
in Sec. 250.164a, and return the remaining copies to the consignor who 
shall distribute them in accordance with the instructions on ATF Form 
5110.31.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985]



Sec. 250.199c  Action by carrier.

    The carrier of the spirits specified on the ATF Form 5110.31 shall, 
at the time of unlading at the port of arrival in the United States, 
segregate and arrange the containers of spirits of convenient customs 
examination and shall assume any expense incurred in connection 
therewith.



Sec. 250.199d  Customs inspection and release.

    On receipt of a properly executed ATF Form 5110.31 from the 
consignor, the customs officer at the port of arrival in the United 
States shall inspect the corresponding shipment of spirits:
    (a) If a shipment is in a bulk conveyance, and:
    (1) The seals are intact, he shall release the shipment; or
    (2) If the seals are broken, he shall, before release of the 
spirits, affix customs seals.
    (b) If a shipment in packages does not arrive in a sealed 
conveyance, the packages shall be inspected, and if it appears that any 
package has sustained a loss, the package shall be weighed and its new 
gross weight shall be entered in contrasting color on the package gauge 
record attached to the related ATF Form 5110.31. The serial numbers of 
any seals affixed by the customs officers shall be reported on ATF Form 
5110.31 under remarks with an explanation and description of any 
evidence of loss. After completing his inspection, the customs officer 
shall execute his certificate on each copy of ATF Form 5110.31 and show 
thereon any exceptions found at the time of his release for transfer of 
the spirits to internal revenue bond. Missing packages should be 
reported separately from packages which have sustained losses. The 
customs officer shall then release the spirits to the consignee's 
representative and distribute all forms in accordance with the 
instructions on ATF Form 5110.31.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985]



Sec. 250.199e  [Reserved]



Sec. 250.199f  Consignee premises.

    (a) General. When Puerto Rican spirits are received from customs 
custody under the provisions of this subpart, the consignee proprietor 
shall execute the certificate of receipt on ATF Form 5110.31 and examine 
all containers for evidence of loss. If it appears that spirits were 
lost by theft or unusual event,

[[Page 58]]

the proprietor shall determine the quantity of spirits lost and report 
the loss according to 27 CFR 19.562.
    (b) Packages. Packages shall be received on bonded premises by the 
proprietor on the basis of the most recent official gauge.
    (c) Distribution of forms. The proprietor shall retain the original 
of ATF Form 5110.31 (and any attachments) and submit the copy of each to 
the regional director (compliance).

(Approved by the Office of Management and Budget under control numbers 
1512-0200 and 1512-0250)

[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985]



   Subpart J--Products Coming Into the United States From the Virgin 
                                 Islands



Sec. 250.200  Taxable status.

    (a) Liquors coming into the United States from the Virgin Islands, 
except as provided in Sec. 250.201, are subject to a tax equal to the 
internal revenue tax imposed upon the production in the United States of 
like liquors. Articles coming into the United States from the Virgin 
Islands, except as provided in Sec. 250.201, are subject to tax on the 
liquors contained therein at the rates imposed in the United States on 
like liquors of domestic production.
    (b) The excise taxes collected on distilled spirits and articles 
containing distilled spirits shall be deposited into the Treasury of the 
Virgin Islands only if at least 92 percent of the alcoholic content of 
such product is rum. The amount deposited into the Treasury of the 
Virgin Islands shall not exceed the lesser of $10.50, or the rate 
imposed by 26 U.S.C. 5001(a)(1) (including adjustments to the effective 
tax rate under 26 U.S.C. 5010), on each proof gallon of such distilled 
spirits or article containing distilled spirits coming into the United 
States. Such excise tax payments to the Treasury of the Virgin Islands 
will be reduced by one percent and the estimated amount of refunds or 
credits, and may be further reduced by certain amounts deposited to the 
U.S. Treasury as miscellaneous receipts. The moneys so transferred and 
paid over shall constitute a separate fund in the Treasury of the Virgin 
Islands, and may be expended as the Virgin Islands legislature may 
determine.
    (c) Except for products described in 26 U.S.C. 7652(c), no excise 
taxes shall be deposited into the Treasury of the Virgin Islands if an 
excise tax subsidy is provided by the Virgin Islands that is of a kind 
different from, or in an amount per value or volume of production 
greater than, any subsidy offered by the Virgin Islands to industries 
manufacturing products not subject to Federal excise tax.

(Sec. 2682, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 7652))

[T.D. ATF-175, 49 FR 20804, May 16, 1984, as amended by T.D. ATF-206, 50 
FR 15888, Apr. 23, 1985]



Sec. 250.201  Products exempt from tax.

    (a) General. Industrial spirits, denatured spirits, and products 
made with denatured spirits in the Virgin Islands may be brought into 
the United States without incurring tax liability imposed by 26 U.S.C. 
5001 or 7652.
    (b) Industrial spirits. A distiller of industrial spirits who 
qualifies under regulations issued by the Governor of the Virgin Islands 
may ship industrial spirits to a tax-free alcohol user in the United 
States who holds a permit under part 22 of this chapter. Shipments shall 
be made in accordance with the requirements of subpart O of this part.
    (c) Denatured spirits. A distiller who qualifies under the 
regulations issued by the Governor of the Virgin Islands and who 
denatures spirits in accordance with part 21 of this chapter may ship 
(1) completely denatured alcohol to anyone in the United States, and/or 
(2) specially denatured spirits to a dealer or user of specially 
denatured spirits in the United States or Puerto Rico who holds a permit 
under part 20 of this chapter. Shipments shall be made in accordance 
with the requirements of subpart O of this part.
    (d) Products made with denatured spirits. A person in the Virgin 
Islands who manufactures products with completely denatured alcohol or 
specially denatured spirits in accordance with the requirements of part 
20 of this chapter and regulations issued by the Governor of the Virgin 
Islands may ship those products to the United

[[Page 59]]

States in accordance with the requirements of subpart O of this part.

[T.D. ATF-199, 50 FR 9199, Mar. 6, 1985]



Sec. 250.201a  Production in the Virgin Islands for tax-free shipment to the United States.

    (a) Authority of the Governor to issue regulations. The Governor of 
the Virgin Islands, or his duly authorized agents, are authorized to 
issue or adopt such regulations (and to approve such bonds, and to 
issue, suspend, or revoke such permits, as may be required by such 
regulations) as are necessary to insure that:
    (1) Industrial spirits produced or manufactured in the Virgin 
Islands and shipped to the United States free of tax for the purposes 
authorized in 26 U.S.C. 5214(a) (2) and (3);
    (2) Denatured spirits manufactured in the Virgin Islands for 
shipment to the United States free of tax, and
    (3) Products manufactured in the Virgin Islands with denatured 
spirits, for shipment to the United States free of tax, conform in all 
respects to the requirements of law and this chapter imposed on like 
products of domestic manufacture.
    (b) Law and regulations applicable. Regulations having been issued 
by the Governor of the Virgin Islands and concurred in by the Secretary 
of the Treasury of the United States to govern the production, 
warehousing, and denaturation of spirits and the use of denatured 
spirits in the manufacture of products for shipment to the United States 
free of tax, such regulations are applicable in the Virgin Islands and 
the Virgin Islands are hereby exempted from
    (1) All provisions of 26 U.S.C. chapter 51, with the exception of 26 
U.S.C. 5314(b) and 5687; and
    (2) The provisions of this chapter in respect of the production, 
bonded warehousing, denaturation, and withdrawal of distilled spirits 
and the use of denatured spirits in the United States:

Provided, That such exemption shall be effective only to the extent that 
any amendments or revisions of the regulations issued by the Governor of 
the Virgin Islands, or his duly authorized agents, are concurred in by 
the Secretary of the Treasury of the United States or his delegate. 
Otherwise, all provisions of law as provided in 26 U.S.C. 5314(b), and 
the provisions of this chapter in respect of the production, bonded 
warehousing, denaturation, and withdrawal from bond of distilled spirits 
and denatured spirits and the use of denatured spirits in the 
manufacture of products shall extend to and apply in the Virgin Islands 
(i) in respect of the production, bonded warehousing, and withdrawal of 
spirits for shipment to the United States free of tax for the purposes 
authorized in 26 U.S.C. 5214(a) (2) and (3), and (ii) in respect of the 
production, bonded warehousing, and denaturation of spirits, and to the 
withdrawal and use of denatured spirits, where the denatured spirits or 
products containing denatured spirits are to be shipped to the United 
States free of tax.

[T.D. 6402, 24 FR 6090, July 30, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55853, Sept. 28, 1979; T.D. 
ATF-198, 50 FR 8552, Mar. 1, 1985]



Sec. 250.201b  [Reserved]



Sec. 250.201c  Shipments of bulk distilled spirits to the United States without payment of tax.

    Bulk distilled spirits may be brought into the United States from 
the Virgin Islands without payment of tax for transfer from customs 
custody to the bonded premises of a distilled spirits plant qualified 
under part 19 of this chapter. Such shipments are subject to the 
provisions of subpart Oa.

[T.D. ATF-62, 44 FR 71715, Dec. 11, 1979]



Sec. 250.202  Requirements of the Federal Alcohol Administration Act.

    Every person, except an agency of a State or a political subdivision 
thereof or any officer or employee of any such agency, bringing liquors 
into the United States from the Virgin Islands for nonindustrial use 
must obtain an importer's basic permit therefor and file with the 
district director of customs at the port of entry a certified or 
photostatic copy thereof, and every

[[Page 60]]

person and any agency of a State or political subdivision thereof or any 
officer or employee of such agency, bringing liquors into the United 
States from the Virgin Islands for nonindustrial use must file with the 
district director of customs at the port of entry a certificate of label 
approval, in accordance with the requirements of the Federal Alcohol 
Administration Act and regulations issued pursuant thereto. Tourists 
bringing liquors into the United States for personal or other 
noncommercial use are not subject to the provisions of the Federal 
Alcohol Administration Act or regulations issued pursuant thereto. 
(Parts 1, 4, 5, and 7 of this chapter)

(Secs. 3, 5, 49 Stat. 978, as amended, 981, as amended; 27 U.S.C. 203, 
205)

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 250.202, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 250.203  Containers of 1 gallon (3.785 liters) or less.

    Containers of distilled spirits brought into the United States from 
the Virgin Islands, having a capacity of not more than 1 gallon (3.785 
liters), shall conform to the requirements of subpart P of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374 (26 U.S.C. 5301))

[T.D. ATF-34, 41 FR 46864, Oct. 26, 1976]



Sec. 250.203a  Containers in excess of 1 gallon (3.785 liters).

    Containers of distilled spirits brought into the United States from 
the Virgin Islands, having a capacity in excess of 1 gallon (3.785 
liters), are required to be marked in accordance with customs 
regulations (19 CFR chapter I).

[T.D. 6695, 28 FR 12936, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-34, 41 FR 46864, Oct. 26, 1976; T.D. 
ATF-206, 50 FR 23955, June 7, 1985]



Sec. 250.204  Regauge.

    Distilled spirits withdrawn from insular bonded warehouses for 
shipment to the United States may be gauged at the time of withdrawal by 
an insular gauger. When such gauges are made, a record of gauge shall be 
prepared by the insular gauger showing the name of the distiller; and 
the serial number, the proof of the spirits, and the wine and proof 
gallon contents of each package gauged. The report of gauge shall be 
attached to the certificate prescribed in Sec. 250.205.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8552, Mar. 1 1985]



Sec. 250.204a  Verification of eligible wines and eligible flavors.

    (a) Any person who, after December 1, 1990, brings into the United 
States from the Virgin Islands any distilled spirits on which the tax is 
to be paid or determined at an effective tax rate based in part on the 
alcohol content derived from eligible flavors or eligible wines shall, 
before the first tax determinaton at that rate, request and receive a 
statement of eligibility for each wine or flavor to be used in the 
computation of the effective tax rate.
    (b) To receive a statement of eligibility, the person bringing in 
the distilled spirits shall submit to the ATF National Laboratory, 1401 
Research Boulevard, Rockville, MD 20850, the following:
    (1) An 8-ounce sample of each distilled spirits, wine and flavor 
used in the product;
    (2) A statement of composition of each flavor, listing--
    (i) The name and percentage of alcohol by volume of the flavor; and
    (ii) The name and quantity of each ingredient used in the 
manufacture of the flavor; and
    (3) A statement of the kind and alcoholic content of each wine.

(Approved by Office of Management and Budget under control number 1512-
0352)

(Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 
U.S.C. 7652); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 
U.S.C. 5001); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 
U.S.C. 5010))

[T.D. ATF-297, 55 FR 18067, Apr. 30, 1990]



Sec. 250.205  Certificate.

    (a) Every person bringing liquors or articles under this part into 
the United

[[Page 61]]

States from the Virgin Islands, except tourists, shall obtain a 
certificate in the English language from the manufacturer for each 
shipment showing the following information:
    (1) The name and address of the consignee.
    (2) The kind and brand name.
    (3) The quantity thereof as follows--
    (i) If distilled spirits, the proof gallons or liters and degree of 
proof;
    (ii) If wine, the taxable grade and wine gallons;
    (iii) If beer, the gallons (liquid measure) and the percentage of 
alcohol by volume; and
    (iv) If articles, the kind, quantity, and proof of the liquors used 
therein.
    (4) For liquors manufactured under a formula--
    (i) The number and date of the approved formula;
    (ii) A declaration that the liquors have been manufactured in 
accordance with the approved formula; and
    (iii) The name and address of the person filing the formula.
    (5) The name and address of the producer.
    (6) For liquors and articles containing liquors produced outside of 
the Virgin Islands, the country of origin for each such liquor.
    (7) For distilled spirits, a certification by the insular gauger as 
to whether they were regauged when withdrawn from the insular bonded 
warehouse and, if regauged, whether they were at the time of withdrawal 
at the proof indicated on the attached record of gauge.
    (8) For distilled spirits which contain eligible wine or eligible 
flavors, the effective tax rate applied to the product and the elements 
necessary to compute the effective tax rate in accordance with 
Sec. 250.262a as follows--
    (i) Proof gallons of distilled spirits (exclusive of distilled 
spirits derived from eligible flavors);
    (ii) Wine gallons of each eligible wine and the percentage of 
alcohol by volume of each;
    (iii) Proof gallons of distilled spirits derived from eligible 
flavors; and
    (iv) On or after December 1, 1990, the name of the manufacturer, 
formula number from ATF F 5530.5 (1678) or 5150.19 and date of approval 
or the date of the statement of eligibility for each eligible flavor 
(See Sec. 250.204a); and
    (v) After December 1, 1990, the date of the statement of eligibility 
for each eligible wine.
    (b) The person bringing the liquors or articles into the United 
States shall file the certificate and record of gauge with the district 
director of customs at the port of entry, at the time of entry summary, 
as provided in Secs. 250.260 and 250.302.

(Approved by the Office of Management and Budget under control number 
1512-0352.)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1366, as amended (26 U.S.C. 5232); 
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18067, Apr. 30, 1990]



Sec. 250.206  Marking packages and cases.

    The distiller, rectifier, or bottler shall serially number each 
case, barrel, cask, or similar container of distilled spirits filled for 
shipment to the United States. In addition to the serial number of the 
container, the distiller, rectifier, or bottler shall plainly print, 
stamp, or stencil with durable coloring material, in letters and figures 
not less than one-half inch high, on the head of each barrel, cask or 
similar container or on one side of each case, as follows:
    (a) The name of the manufacturer;
    (b) The brand name and kind of liquor; and
    (c) The wine and proof gallon contents; or, for bottles filed 
according to the metric standards of fill prescribed by Sec. 5.47a, of 
this chapter, the contents in liters and the proof of the spirits.

[T.D. ATF-43, 42 FR 30836, June 17, 1977]



Sec. 250.207  Destruction of marks and brands.

    The marks, brands, and serial numbers required by this part to be 
placed on barrels, casks, or similar containers, or cases, shall not be 
removed, obscured or obliterated before the contents thereof have been 
removed.

[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985]



Sec. 250.209  Samples.

    The Director may require samples of liquors and articles to be 
submitted

[[Page 62]]

whenever desired for laboratory analyses in order to determine the rate 
of tax applicable thereto.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2250, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

                      Special (Occupational) Taxes



Sec. 250.210  Liquor dealer's special taxes.

    Every person bringing liquors into the United States from the Virgin 
Islands, who sells, or offers for sale, such liquors shall file Form 
5630.5 with ATF in accordance with the instruction on the form, and pay 
special occupational tax as a wholesale dealer in liquor or as a retail 
dealer in liquor, in accordance with the laws and regulations governing 
the payment of such special taxes (part 194 of this chapter).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340 as amended, 1343 as amended, 
1344 as amended (26 U.S.C. 5111, 5112, 5121, 5122))

[T.D. ATF-70, 45 FR 33981, May, 21, 1980, as amended by T.D. ATF-251, 52 
FR 19339, May 22, 1987]



Sec. 250.211  Warehouse receipts covering distilled spirits.

    Since the sale of warehouse receipts for distilled spirits is 
equivalent to the sale of distilled spirits, every person bringing 
distilled spirits into the United States from the Virgin Islands, who 
sells, or offers for sale, warehouse receipts for distilled spirits 
stored in warehouses, or elsewhere, incurs liability to special tax as a 
dealer in liquors at the place where such warehouse receipts are sold, 
or offered for sale, and must file return and pay occupational tax as 
provided in Sec. 250.210.

(68A Stat. 618, 620, 621; 26 U.S.C. 5111, 5112, 5121, 5122)



        Subpart K--Formulas for Products From the Virgin Islands

    Source: T.D. ATF-62, 44 FR 71715, Dec. 11, 1979, unless otherwise 
noted.



Sec. 250.220  Formulas for liquors.

    (a) Distilled spirits products. Persons in the Virgin Islands who 
ship distilled spirits beverage products to the United States shall 
comply with the formula requirements of part 5 of this chapter. If any 
product contains liquors made outside of Virgin Islands, the country of 
origin for each such liquor shall be stated on the formula. All formulas 
required by this paragraph shall be submitted on ATF Form 5110.38, in 
accordance with Sec. 250.224.
    (b) Wine. Persons in the Virgin Islands who ship wine to the United 
States shall comply with the formula requirements of part 240 of this 
chapter. If any wines contains liquors made outside of the Virgin 
Islands, the country of origin for each such liquor shall be stated on 
the formula. All formulas required by this paragraph shall be submitted 
on ATF Form 698 Supplemental, in accordance with Sec. 250.224.

[T.D. ATF-62, 44 FR 71715, Dec. 11, 1979, as amended by T.D. ATF-198, 50 
FR 8552, Mar. 1, 1985]



Sec. 250.221  Formulas for articles, eligible articles and products manufactured with denatured spirits.

    (a) Formulas for articles and eligible articles. Formulas for 
articles made with distilled spirits must show the quantity and proof of 
the distilled spirits used, and the percentage of alcohol by volume 
contained in the finished product. Formulas for articles made with beer 
or wine must show the kind and quantity thereof (liquid measure), and 
the percent of alcohol by volume of such beer or wine. Formulas and 
samples for eligible articles are required in accordance with subpart F 
of part 17 of this chapter.
    (b) Formulas for products manufactured with denatured spirits. 
Products manufactured with denatured spirits shall be manufactured in 
accordance with the formula requirements of part 20 of this chapter for 
similar products made in the United States.
    (1) Products may be made with completely denatured alcohol for sale 
under brand names under part 20 of this chapter without obtaining an 
approved formula. If ingredients are added in sufficient quantities to 
materially change the composition and character of the completely 
denatured alcohol, the product is not classified as completely denatured 
alcohol and may not be marked, branded, or sold as completely denatured 
alcohol.

[[Page 63]]

    (2) Products made with specially denatured spirits shall be made in 
accordance with (i) a general-use formula approved as provided in part 
20 of this chapter, or (ii) an approved formula on Form 5150.19, or 
previously approved on ATF Form 1479-A or 27-B Supplemental.
    (c) Formulas required. Formulas required by this section shall be 
submitted on Form 5150.19, except that formulas for eligible articles 
shall be submitted on Form 5154.1 (formerly 1678). Formulas shall be 
submitted in accordance with Sec. 250.224. Any formula for an eligible 
article approved on Form 5150.19 prior to October 23, 1986, shall 
continue to be valid until revoked or voluntarily surrendered. Any 
person holding such a formula is not required to submit a new formula.

(Approved by the Office of Mangement and Budget under control number 
1512-0494)

[T.D. ATF-62, 44 FR 71715, Dec. 11, 1979, as amended by T.D. ATF-199, 50 
FR 9199, Mar. 6, 1985; T.D. ATF-263, 52 FR 46595, Dec. 9, 1987; T.D. 
ATF-379, 61 FR 31427, June 20, 1996]



Sec. 250.222  Still wines containing carbon dioxide.

    (a) General. Still wines may contain not more than 0.392 gram of 
carbon dioxide per 100 milliliters of wine; except that a tolerance to 
this maximum limitation, not to exceed 0.009 gram of carbon dioxide per 
100 milliliters of wine, will be allowed where the amount of carbon 
dioxide in excess of 0.392 gram per 100 milliliters of wine was due to 
mechanical variations which could not be completely controlled under 
good commercial practices. Such tolerance will not be allowed where it 
is found that the limitation of 0.392 gram of carbon dioxide per 100 
milliliters of wine is continuously or intentionally exceeded, or where 
the variation results from the use of methods or equipment not in accord 
with good commercial practices.
    (b) Notice required. Proprietors intending to add carbon dioxide to, 
or retain carbon dioxide in, still wines to be shipped to the United 
States shall submit a notice to the Chief, Puerto Rican Operations. The 
notice shall show the name and address of the proprietor and shall 
identify the method or process, the kinds (class and type) of wine, and 
the type of equipment to be used. A corrected notice shall be filed if 
there is any change (except for minor changes) in the information 
contained in the notice.
    (c) Filing and disposition of notice. The notice required by 
paragraph (b) of this section shall be submitted in triplicate to the 
Chief, Puerto Rican Operations, who shall retain one copy, forward one 
copy to the Commissioner of Finance of the Virgin Islands, and return 
one copy to the proprietor. The proprietor shall keep the notice 
available for examination by insular agents.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended (26 U.S.C 5041))

[T.D. ATF-62, 44 FR 71715, Dec. 11, 1979, as amended by T.D. ATF-172, 49 
FR 14943, Apr. 16, 1984]



Sec. 250.223  Changes of formulas.

    Any change in the ingredients composing a product covered by an 
approved formula will necessitate the submission of a new formula.



Sec. 250.224  Filing and disposition of formulas.

    Prior to shipment formulas required by this subpart shall be 
submitted in triplicate to and approved by the Director. The Director 
shall retain one copy, forward one copy to the Commissioner of Finance 
of the Virgin Islands, and return one copy to the applicant. The 
applicant shall maintain copies of approved formulas available for 
examination by insular agents.



Sec. 250.225  Previously approved formulas.

    Any formula approved on Form 27-B Supplemental prior to January 1, 
1980, shall continue to be valid until revoked or voluntarily 
surrendered. Any person holding such a formula is not required to submit 
a new formula. If an approved formula on Form 27-B Supplemental 
indicates that carbon dioxide will be added to, or retained in, still 
wine, the notice requirement of Sec. 250.222 shall not apply.

[[Page 64]]



    Subpart L--Closures for Distilled Spirits From the Virgin Islands

                                 General



Sec. 250.230  Containers of distilled spirits to bear closures.

    Containers of 1 gallon (3.785 liters) or less of distilled spirits, 
upon which all Federal internal revenue taxes have been paid or 
determined under provisions of this part, shall have closures or other 
devices affixed in accordance with the provisions of this part.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23955, June 7, 1985]



Sec. 250.231  Affixing closures.

    Closures or other devices shall be securely affixed to containers 
having capacity of 1 gallon (3.785 liters) or less so as to leave a 
portion remaining on the container when it is opened. In addition, the 
closures or other devices shall be constructed in such a manner as to 
require that they be broken to gain access to the contents of the 
containers.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23955, June 7, 1985]



      Subpart M--Procedure at Port of Entry From the Virgin Islands



Sec. 250.260  Certificate.

    Persons (except tourists) bringing liquors or articles from the 
Virgin Islands into the United States shall file the certificate 
provided for in Sec. 250.205 with the district director of customs at 
the port of entry in the United States.

[T.D. ATF-62, 44 FR 71716, Dec. 11, 1979]



Sec. 250.261  Action by district director of customs.

    The district director of customs will direct the proper customs 
gauger to determine the taxable quantity of liquors contained in the 
consignment by regauge or inspection and report the result thereof to 
the district director of customs. Upon receipt of such report the 
district director of customs will refer to the certificate required by 
Sec. 250.205 covering the product to determine the rate of internal 
revenue tax applicable thereto. When the rate of tax applicable to the 
product has been ascertained, the tax due on the consignment will be 
determined according to Secs. 250.262 through 250.265.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 250.261, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



250.262  Determination of tax on distilled spirits.

    (a) If the certificate required by Sec. 250.205 covers distilled 
spirits, and the distilled spirits are not being transferred under 
subparts 0 or Oa of this part, the tax imposed by 26 U.S.C. 7652 which 
provides for a tax equal to the tax imposed by 26 U.S.C. 5001 will be 
collected on each proof gallon, and fractional part thereof, contained 
in the shipment.
    (b) A credit against the tax imposed on distilled spirits by 26 
U.S.C. 7652 is allowable under 26 U.S.C. 5010 on each proof gallon of 
alcohol derived from eligible wine or from eligible flavors which do not 
exceed 2 \1/2\ percent of the finished product on a proof gallon basis. 
The credit is allowable at the time the tax is payable as if it 
constituted a reduction in the rate of tax.
    (c) Where credit against the tax is desired, the person liable for 
the tax shall establish an effective tax rate in accordance with 
Sec. 250.262a. The effective tax rate established will be applied to 
each withdrawal or other disposition of the distilled spirits within the 
United States.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); 
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010), Act 
of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 U.S.C. 
7652))

[T.D. ATF-297, 55 FR 18068, Apr. 30, 1990]



Sec. 250.262a  Computation of effective tax rate.

    (a) The proprietor shall compute the effective tax rate for 
distilled spirits

[[Page 65]]

containing eligible wine or eligible flavors as the ratio of the 
numerator and denominator as follows:
    (1) The numerator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product 
(exclusive of distilled spirits derived from eligible flavors), 
multipled by the tax rate prescribed by 26 U.S.C. 5001;
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by the tax rate prescribed by 26 U.S.C. 5041(b) (1), (2), or 
(3), as applicable; and
    (iii) The proof gallons of all distilled spirits derived from 
eligible flavors used in the product, multiplied by the tax rate 
prescribed by 26 U.S.C. 5001, but only to the extent that such distilled 
spirits exceed 2\1/2\% of the denominator prescribed in paragraph (a)(2) 
of this section.
    (2) The denominator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product, 
including distilled spirits derived from eligible flavors; and
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by twice the percentage of alcohol by volume of each, divided 
by 100.
    (b) In determining the effective tax rate, quantities of distilled 
spirits, eligible wine, and eligible flavors will be expressed to the 
nearest tenth of a proof gallon. The effective tax rate may be rounded 
to as many decimal places as the proprietor deems appropriate, provided 
that, such rate is expressed no less exactly than the rate rounded to 
the nearest whole cent, and the effective tax rates for all products 
will be consistently expressed to the same number of decimal places. In 
such case, if the number is less than five it will be dropped; if it is 
five or over, a unit will be added.
    (c) The following is an example of the use of the formula.
---------------------------------------------------------------------------

    \1\ Proof gallons by which distilled spirits derived from eligible 
flavors exceed 2\1/2\% of the total proof gallons in the batch 
(100.9-(2\1/2\%) x 3,371.8=16.6).

                              BATCH RECORD
Distilled spirits.........................  2249.1 proof gallons.
Eligible wine (14% alcohol by volume).....  2265.0 wine gallons.
Eligible wine (19% alcohol by volume).....  1020.0 wine gallons.
Eligible flavors..........................  100.9 proof gallons.

                                            [GRAPHIC] [TIFF OMITTED] TC05OC91.032
                                            

(Approved by the Office of Management and Budget under control 
number1512-0352)

(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18068, Apr. 30, 1990, as amended by T.D. ATF-307, 
55 FR 52741, Dec. 21, 1990]



Sec. 250.263  Determination of tax on beer.

    If the certificate prescribed in Sec. 250.205 covers beer, the beer 
tax will be collected on the basis of the number of barrels of 31 
gallons each, or fractional parts thereof, contained in the shipment.

(68A Stat. 611, as amended; 26 U.S.C. 5051)



Sec. 250.264  Determination of tax on wine.

    If the certificate prescribed in Sec. 250.205 covers wine, the wine 
tax will be collected at the rates imposed by section 5041, Internal 
Revenue Code, as amended.

(68A Stat. 609, as amended; 26 U.S.C. 5041)

[[Page 66]]



Sec. 250.265  Determination of tax on articles.

    Where articles contain distilled spirits, the tax will be collected 
at the rate prescribed by 26 U.S.C. 5001(a)(1) on all alcohol contained 
therein, regardless of the source. Articles containing only wine and/or 
beer will be taxed at the rates prescribed by 26 U.S.C. 5041 and/or 
5051, respectively. The quantities and kinds of liquors will be shown on 
the certificate prescribed in Sec. 250.205.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001, 
5007))

[T.D. ATF-62, 44 FR 71717, Dec. 11, 1979]



Sec. 250.266  Tax payment.

    The internal revenue tax on liquors (except spirits transferred 
under subparts O or Oa of this part) and articles coming into the United 
States from the Virgin Islands shall be paid to the district director of 
customs at the port of entry, as provided by customs regulations. (19 
CFR Ch. I)

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by 
T.D. ATF-198, 50 FR 8554, Mar. 1, 1985]



Sec. 250.267  Payment of tax by electronic fund transfer.

    (a) Each person bringing liquors and articles into the United States 
from the Virgin Islands who was liable, during a calendar year, for a 
gross amount equal to or exceeding five million dollars in distilled 
spirits taxes combining tax liabilities incurred under this part and 
parts 19 and 251 of this chapter, a gross amount equal to or exceeding 
five million dollars in wine taxes combining tax liabilities incurred 
under this part and parts 240 and 251 of this chapter, or a gross amount 
equal to or exceeding five million dollars in beer taxes combining tax 
liabilities incurred under this part and parts 25 and 251 of this 
chapter, shall use a commercial bank in making payment by electronic 
fund transfer (EFT), as defined in paragraph (c) of this section, of 
such taxes during the succeeding calendar year. Payment of such taxes by 
cash, check, or money order is not authorized for a person bringing 
liquors and articles into the United States from the Virgin Islands who 
is required, by this section, to make remittances by EFT. For purposes 
of this section, the dollar amount of tax liability is to be summarized 
separately for distilled spirits taxes, wine taxes, or beer taxes, and 
is defined as the gross tax liability on all taxable withdrawals from 
premises in the United States and importations (including products of 
the same tax class brought into the United States from Puerto Rico or 
the Virgin Islands) during the calendar year, without regard to any 
drawbacks, credits, or refunds, for all premises from which such 
activities are conducted.
    (b) For the purposes of this section, a ``person'' includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
person for the purpose of determining who is required to make 
remittances by EFT.
    (c) Electronic fund transfer or EFT means any transfer of funds, 
other than a transaction originated by check, draft, or similar paper 
instrument, which is initiated through an electronic terminal, 
telephonic instrument, or computer of magnetic tape, so as to order, 
instruct, or authorize a financial institution to either debit or credit 
an account, in accordance with procedures established by the U.S. 
Customs Service.
    (d) Each person who is required by this section to make remittances 
by EFT shall make the EFT remittance in

[[Page 67]]

accordance with the requirements of the U.S. Customs Service.

(Approved by the Office of Management and Budget under Control Number 
1512-0457)

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-245, 52 FR 532, Jan. 7, 1987]



    Subpart N--Records and Reports of Liquors From the Virgin Islands

       Record and Report of Liquors Brought Into the United States



Sec. 250.272  General requirements.

    Except as provided in Sec. 250.273, every person, other than a 
tourist, bringing liquors into the United States from the Virgin Islands 
shall keep such records and render reports of the physical receipt and 
disposition of such liquors as are required to be kept by a wholesale or 
retail dealer, as applicable, under the provisions of part 194 of this 
chapter. Any importer who is responsible for release of the liquors from 
customs custody and who does not take physical possession of the liquors 
shall keep commercial records reflecting such release; such records 
shall identify the kind and quantity of the liquors released, the name 
and address of the person receiving the liquors from customs custody, 
and shall be filed chronologically by release dates. Records and reports 
will not be required under this part with respect of liquors while in 
customs custody.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(72 Stat. 1342, 1345; 26 U.S.C. 5114, 5124)

[T.D. ATF-2, 37 FR 22739, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984]



Sec. 250.273  Proprietors of taxpaid premises.

    Transactions involving the bringing of liquors into the United 
States from the Virgin Islands by proprietors of distilled spirits 
plants in the United States qualified under the provisions of this 
chapter shall be recorded and reported in accordance with the 
regulations governing the operations of such premises in the United 
States.

[T.D. 6478, 25 FR 6203, July 1, 1960. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 250.273a  Transfer record.

    The transfer record for Virgin Islands spirits prescribed in 
Sec. 250.301 shall show the:
    (a) Date prepared;
    (b) Serial number of the transfer record, beginning with ``1'' each 
January 1;
    (c) Name of the proprietor and distilled spirits plant number to 
which consigned;
    (d) Name and address of the consignor;
    (e) Kind of spirits;
    (f) Name of the producer;
    (g) Age (in years, months and days) of the spirits;
    (h) Proof of the spirits;
    (i) Type and serial number of containers; and
    (j) Proof gallons of spirits in the shipment.

(Approved by the Office of Management and Budget under control number 
1512-0250)

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8554, Mar. 1, 1985]



Sec. 250.273b  Package gauge record.

    When required in this part with respect to Virgin Islands spirits, a 
package gauge record shall be prepared to show:
    (a) The date prepared;
    (b) The related transaction record and its serial number;
    (c) The producer, his name and address; and
    (d) For each package, the:
    (1) Package identification or serial number;
    (2) Kind of spirits;
    (3) Gross weight;
    (4) Tare;
    (5) Net weight;
    (6) Proof gallons; and
    (7) Proof.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8554, Mar. 1, 1985]

[[Page 68]]

               Filing and Retention of Records and Reports



Sec. 250.275  Filing.

    (a) All records and reports required by this part will be maintained 
separately, by transaction or reporting date, at the importer's place of 
business. The regional director (compliance) may, pursuant to an 
application, authorize files, or an individual file, to be maintained at 
another business location under the control of the importer, it the 
alternative location does not cause undue inconvenience to ATF or 
Customs officers desiring to examine the files or delay in the timely 
submission of documents.
    (b) If an importer conducts wholesale operations, one legible copy 
of each required record of receipt and disposition shall be filed not 
later than one business day following the date of transaction.
    (c) If an importer conducts only retail operations, either loose-
leaf or book records may be maintained for the daily receipt of liquors 
which contain all the required information.
    (d) Supporting documents, such as consignors' invoices, delivery 
receipts, bills or lading, etc., or exact copies of the same, may be 
filed in accordance with the importer's regular accounting and 
recordkeeping practices.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended 
(26 U.S.C. 5114, 5555))

[T.D. ATF-116, 47 FR 51573, Nov. 16, 1982]



Sec. 250.276  Retention.

    All records required by this part, documents or copies of documents 
supporting these records, and file copies of reports required by this 
part to be submitted to the regional director (compliance) or to the 
district district director of customs shall be retained for not less 
than three years, and during this period shall be available, during 
business hours, for inspection and copying by ATF or customs officers. 
Furthermore, the regional director (compliance) may require these 
records to be kept for an additional period of not more than three years 
in any case where he determines retention necessary or advisable. Any 
records, or copies thereof, containing any of the information required 
by this part to be prepared, wherever kept, shall also be made available 
for inspection and copying.

(68A Stat. 731 (26 U.S.C. 6001); Sec. 201, Pub. L. 85-859, 72 Stat. 
1342, 1345, 1348, 1361, 1395 (26 U.S.C. 5114, 5124, 5146, 5207, 5555))

[T.D. ATF-50, 43 FR 20494, May 12, 1978]

 Report of Disposition of Red Strip Stamps on Discontinuance of Business



Sec. 250.277  Procedure.

    The importer who discontinues or sells his business shall recall 
from his agents, and his bottlers or exporters in the Virgin Islands, 
all unused stamps in their custody. He shall submit his entire stock of 
unused stamps, accompanied by a report, in duplicate, of inventory, by 
size and quantity, to the regional director (compliance). The same 
procedure may be followed by an importer who has unused stamps for which 
he has no further use for any reason. The regional director (compliance) 
shall then destroy the stamps and, after such destruction, note the 
action taken on both copies of the inventory. He shall retain the 
original and return the copy of the inventory to the importer. In the 
case of discontinuance or sale of the business, the importer shall, 
within 5 days of the receipt of the returned copy of the inventory, note 
the disposition of the stamps on Form 96, mark the report ``Final'', and 
submit it to the regional director (compliance).

(72 Stat. 1358; 26 U.S.C. 5205)

[T.D. ATF-2, 37 FR 22739, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975]



   Subpart O--Tax-Free Shipments to the United States From the Virgin 
                                 Islands

    Source: T.D. ATF-199, 50 FR 9199, Mar. 6, 1985, unless otherwise 
noted.



Sec. 250.291  General.

    (a) Industrial spirits may be shipped into the United States to the 
holder of a permit under part 22 of this chapter, in accordance with 
Sec. 250.292 through

[[Page 69]]

250.294 and regulations issued by the Governor of the Virgin Islands.
    (b)(1) Specially denatured spirits may be shipped into the United 
States to the holder of a permit under part 20 of this chapter, in 
accordance with Secs. 250.292 through 250.294 and regulations issued by 
the Governor of the Virgin Islands.
    (2) Completely denatured alcohol may be shipped to anyone in the 
United States in accordance with Secs. 250.295 through 250.296 and 
regulations issued by the Governor of the Virgin Islands.
    (3) Denatured spirits shall be denatured in accordance with part 21 
of this chapter and regulations issued by the Governor of the Virgin 
Islands.
    (c) Products made with denatured spirits may be shipped to anyone in 
the United States in accordance with Secs. 250.295 through 250.296 and 
regulations issued by the Governor of the Virgin Islands. These products 
are also subject to the requirements of Sec. 250.221 of this part.

     Shipment of Industrial Spirits and Specially Denatured Spirits



Sec. 250.292  Copy of consignee's permit under part 20 or 22.

    The consignor or consignee shall file a copy of the consignee's 
permit issued under part 20 of this chapter (for shipments of specially 
denatured spirits) or part 22 of this chapter (for shipments of 
industrial spirits) with the district director of customs of the port of 
entry. The copy of the permit shall be adequate evidence that the 
consignee is authorized to enter industrial spirits or specially 
denatured spirits free of tax.



Sec. 250.293  Marks on containers.

    (a) Industrial spirits. The shipper shall mark or label each 
immediate container of industrial spirits with the following 
information:
    (1) The name or trade name of the distiller or shipper;
    (2) The words ``Virgin Islands Industrial Spirits'';
    (3) A package identification number as required by subpart R of part 
19 of this chapter;
    (4) The date filled;
    (5) Proof; and
    (6) Quantity in proof gallons.
    (b) Specially denatured spirits. The shipper shall mark or label 
each immediate container of specially denatured spirits with the 
following information:
    (1) Quantity, in gallons, or in liters and gallons;
    (2) A serial number or package identification number;
    (3) Name and address of shipper;
    (4) The words ``Virgin Islands Specially Denatured Alcohol'' or 
``Virgin Islands Specially Denatured Rum,'' as appropriate;
    (5) Formula number prescribed by part 21 of this chapter;
    (6) Proof, if the spirits were denatured at other than 190 proof;
    (7) Denaturants used, if spirits were denatured under an approved 
formula authorizing a choice of denaturants; and
    (8) Quantity of denaturant used, if the approved formula authorizes 
a choice of quantities of denaturants.



Sec. 250.294  Record of shipment.

    (a) Each shipment of industrial spirits or specially denatured 
spirits from the Virgin Islands to the United States shall be 
accompanied by a record of shipment. The record of shipment shall 
consist of an invoice, bill of lading or similar document which shows 
the following information:
    (1) Consignor's name and address;
    (2) Consignee's name, address, and permit number;
    (3) For each formula of specially denatured spirits--
    (i) The formula number prescribed by part 21 of this chapter,
    (ii) The serial numbers or package identification numbers of 
containers, and
    (iii) The total quantity in wine gallons;
    (4) For industrial spirits--
    (i) The package identification numbers of containers, and
    (ii) The total quantity in proof gallons.

[[Page 70]]

    (b) The record of shipment shall be made available to custom 
officers inspecting the shipment.

(Records relating to industrial spirits approved by the Office of 
Management and Budget under control number 1512-0334; records relating 
to specially denatured spirits approved by the Office of Management and 
Budget under control number 1512-0337)

    Shipment of Completely Denatured Alcohol and Products Made With 
                            Denatured Spirits



Sec. 250.295  Marks on containers.

    (a) Completely denatured alcohol. (1) For each immediate container 
of completely denatured alcohol with a capacity exceeding 1 gallon, the 
shipper shall mark or label on the head or side of the package or on the 
side of the casing, the following:
    (i) The name and address of the person filling the container;
    (ii) The contents in gallons;
    (iii) The words ``Virgin Islands Completely Denatured Alcohol''; and
    (iv) The formula number prescribed by part 21 of this chapter.
    (2) In addition, if the container has a capacity of 5 gallons or 
less, the words ``Completely Denatured Alcohol'' shall be in red letters 
on white background, and the label shall also have the words ``Caution--
contains poisonous ingredients'' in red letters on white background.
    (b) Products made with denatured spirits. The shipper shall mark or 
label each immediate container of a product made with denatured spirits 
with the name, trade name or brand name of the product and the name and 
address of the shipper.



Sec. 250.296  Record of shipment.

    (a) Each shipment of completely denatured alcohol or products made 
with denatured spirits shall be accompanied by a record of shipment. The 
record of shipment shall consist of an invoice, bill of lading or 
similar document which shows the following information:
    (1) Consignor's name and address;
    (2) Consignee's name and address;
    (3) Capacity and number of containers;
    (4) Total quantity shipped; and
    (5)(i) For completely denatured alcohol, the words ``Virgin Islands 
Completely Denatured Alcohol'' and the formula number prescribed by part 
21 of this chapter, or
    (ii) For products made with denatured spirits, the name, trade name 
or brand name of the product.
    (b) The record of shipment shall be made available to customs 
officers inspecting the shipment.

(Approved by the Office of Management and Budget under control number 
1512-0337)

                      Arrival in the United States



Sec. 250.297  General.

    The district director of customs shall inspect each shipment of 
industrial spirits, specially denatured spirits, completely denatured 
alcohol, and products made with denatured spirits coming into the United 
States from the Virgin Islands. If the shipment complies with the 
requirements of this part, the products may be released free of tax.



Subpart Oa--Shipment of Bulk Distilled Spirits From the Virgin Islands, 
 Without Payment of Tax, for Transfer From Customs Custody to Internal 
                              Revenue Bond

    Authority: Sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended (26 
U.S.C. 5232).

    Source: T.D. ATF-62, 44 FR 71717, Dec. 11, 1979, unless otherwise 
noted.



Sec. 250.300  General.

    Distilled spirits brought into the United States from the Virgin 
Islands in bulk containers may, under the provisions of this subpart, be 
withdrawn by the proprietor of a distilled spirits plant from customs 
custody and transferred in such bulk containers or by pipeline to the 
bonded premises of his plant, without payment of the internal revenue 
tax imposed on such spirits by 26 U.S.C. 7652. Such spirits so withdrawn 
and transferred to a distilled spirits plant (a) may be redistilled or 
denatured only if 185 degrees or more of proof, and (b) may be withdrawn 
from internal revenue bond for any purpose authorized by 26 U.S.C. 
chapter 51, in

[[Page 71]]

the same manner as domestic distilled spirits. Spirits transferred from 
customs custody to the bonded premises of a distilled spirits plant 
under the provisions of this subpart shall be received and stored 
thereat, and withdrawn or transferred therefrom, subject to the 
provisions of part 19 of this chapter. The person operating the bonded 
premises of the distilled spirits plant to which spirits are transferred 
under the provisions of this subpart shall become liable for the tax on 
distilled spirits withdrawn from customs custody under 26 U.S.C. 5232, 
upon release of the spirits from customs custody, and the person 
bringing the spirits into the United States shall thereupon be relieved 
of his liability for such tax.



Sec. 250.301  Preparation of transfer record.

    The person bringing spirits into the United States from the Virgin 
Islands under this subpart shall prepare a transfer record, in 
triplicate, according to Sec. 250.273a, and present the record to the 
customs officer responsible for inspection and release of the spirits. A 
separate transfer record shall be prepared for each conveyance.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8555, Mar. 1, 1985]



Sec. 250.302  Gauge and certification.

    (a) Gauge. If Virgin Islands spirits to be transferred from customs 
custody to internal revenue bond as provided in this subpart are not 
gauged by an insular gauger at the time of their withdrawal from an 
insular bonded warehouse, as provided in Sec. 250.204 of this chapter, 
the insular consignor shall effect a gauge of each bulk container and 
shall prepare a record of such gauge, in duplicate, and attach both 
copies to the certificate required by Sec. 250.205 of this chapter. If 
the gauge is made by the insular gauger his record of gauge shall be 
prepared in duplicate and both copies shall be attached to the 
certificate.
    (b) Certification. The certification prescribed by Sec. 250.205 of 
this chapter shall be prepared in duplicate if the Virgin Islands 
spirits are to be transferred from customs custody to internal revenue 
bond. Both copies of the certificate, with the applicable record of 
gauge attached, shall be filed with the district director of customs at 
the port of entry. The original of the certificate and related record of 
gauge shall be attached by the customs officer to the original of the 
transfer record received as provided in Sec. 250.301 from the importer.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8555, Mar. 1, 1985]



Sec. 250.303  Customs inspection and release.

    The customs officer shall not release distilled spirits under this 
subpart until he inspects the spirits, and, if it appears that losses in 
transit were sustained from any container, he shall gauge the spirits in 
such container. If the spirits are in a bulk conveyance, the customs 
officer shall record the elements of his gauge on the transfer record, 
or, if the spirits are in packages, on the gauge record required by 
Sec. 250.302, and attach it to the transfer record. The customs officer 
shall also record on the transfer record the port of entry, carrier 
identification, and warehouse entry number. When the consignee has 
complied with all customs requirements, the customs officer shall 
release the spirits for transfer to the distilled spirits plant, by 
dating and signing the transfer record with his title the statement: 
``To the best of my knowledge the information hereon is accurate and the 
spirits are released''. The customs officer shall retain a copy of the 
transfer record and any attachment, forward a copy of the transfer 
record and any attachments to the regional director (compliance), and 
give the original of the transfer record with any attachments to the 
consignee.

[T.D. ATF-198, 50 FR 8555, Mar. 1, 1985]



Sec. 250.304  Bulk conveyances to be sealed.

    When a shipment of distilled spirits from customs custody to the 
distilled spirits plant is made in a tank, tank barge, cargo container, 
tank car, tank truck, or similar bulk conveyance, all openings affording 
access to the spirits

[[Page 72]]

shall be sealed by the customs officer with customs seals in such manner 
as will prevent unauthorized removal of spirits through such openings 
without detection.



Sec. 250.305  Receipt by consignee.

    Proprietors of distilled spirits plants who receive Virgin Islands 
spirits under this subpart shall follow the requirements in 27 CFR part 
19 for spirits received by transfer in bond. However, proprietors are 
not required to file application on ATF Form 5100.16 to receive Virgin 
Islands spirits from customs custody.

[T.D. ATF-198, 50 FR 8555, Mar. 1, 1985]



  Subpart Ob--Claims for Drawback on Eligible Articles From the Virgin 
                                 Islands

    Source: T.D. ATF-263, 52 FR 46595, Dec. 9, 1987, unless otherwise 
noted.



Sec. 250.306  Drawback of tax.

    Any person who brings eligible articles into the United States from 
the Virgin Islands may claim drawback of the distilled spirits excise 
taxes paid on such articles as provided in this subpart.



Sec. 250.307  Special tax.

    Any person filing claim for drawback of tax on eligible articles 
brought into the United States from the Virgin Islands shall pay special 
tax as required by 26 U.S.C. 5131. For purposes of special tax, subparts 
C and D of part 17 of this chapter shall apply as if the use and tax 
determination occurred in the United States at the time the article was 
brought into the United States, and each business location from which 
entry of eligible articles is caused or effected shall be treated as a 
place of manufacture. If special tax is paid for any such business 
location under part 17 of this chapter, as a place where nonbeverage 
products are manufactured for purposes of drawback, then no additional 
special tax need be paid for that location under this section.

[T.D. ATF-263, 52 FR 46595, Dec. 9, 1987, as amended by T.D. ATF-271, 53 
FR 17559, May 17, 1988; T.D. ATF-379, 61 FR 31427, June 20, 1996]



Sec. 250.308  Bonds.

    (a) General. Persons bringing eligible articles into the United 
States from the Virgin Islands and intending to file monthly claims for 
drawback under the provisions of this subpart shall obtain a bond on 
Form 5154.3. When the limit of liability under a bond given in less than 
the maximum amount has been reached, further drawback on monthly claims 
may be suspended until a strengthening or superseding bond in a 
sufficient amount has been furnished. For provisions relating to bonding 
requirements, subpart E of part 17 of this chapter is incorporated in 
this part, but references therein to a regional director (compliance) 
shall apply, for purposes of this part, to the Chief, Puerto Rico 
Operations.
    (b) Approval required. No person bringing eligible articles into the 
United States from the Virgin Islands may file monthly claims for 
drawback under the provisions of this subpart until bond on Form 5154.3 
has been approved by the Chief, Puerto Rico Operations. Bonds approved 
by a regional director (compliance) prior to the effective date of this 
provision shall remain in effect.

[T.D. ATF-379, 61 FR 31427, June 20, 1996]



Sec. 250.309  Claims for drawback.

    (a) General. Persons bringing eligible articles into the United 
States from the Virgin Islands shall file claim for drawback on Form 
2635 (5620.8) with the Chief, Puerto Rico Operations. Upon finding that 
the claimant has satisfied the requirements of this subpart, the 
regional director (compliance) shall allow the drawback of taxes at a 
rate of $1 less than the lesser of $10.50 a proof gallon or the rate 
specified in 26 U.S.C. 5001(a).
    (b) Information on claims. The claim must set forth the following:
    (1) That the special tax has been paid;
    (2) That the eligible articles brought into the United States on 
which drawback is claimed are fully taxpaid or tax-determined;
    (3) That the eligible articles on which drawback is claimed are 
nonbeverage products; and

[[Page 73]]

    (4) That the eligible articles were manufactured in the Virgin 
Islands in compliance with approved formulas in accordance with 
Sec. 250.221.
    (c) Supporting data. Each claim shall be accompanied by supporting 
data as specified in this paragraph. ATF Form 5154.2, Supporting Data 
for Nonbeverage Drawback Claims, may be used, or the claimant may use 
any suitable format that provides the following information:
    (1) The control number of the Special Tax Stamp and the tax year for 
which issued;
    (2) A description of each eligible article as follows:
    (i) Name and type of each product;
    (ii) Name and address of the manufacturer of each product;
    (iii) Formula number under which each product was manufactured;
    (iv) Alcohol content of each product;
    (v) Quantity of each product;
    (vi) Proof gallons of distilled spirits contained in each product;
    (vii) Date of entry of the eligible product into the United States; 
and
    (viii) Evidence of taxpayment of distilled spirits in accordance 
with Sec. 250.266.
    (d) Date of filing claim. Quarterly claims for drawback shall be 
filed with the Chief, Puerto Rico Operations, within the 6 months next 
succeeding the quarter in which the eligible products covered by the 
claim were brought into the United States. Monthly claims for drawback 
may be filed at any time after the end of the month in which the 
eligible products covered by the claim were brought into the United 
States, but must be filed not later than the close of the sixth month 
succeeding the quarter in which the eligible products were brought into 
the United States.

(Approved by the Office of Management and Budget under control number 
1512-0494)

[T.D. ATF-263, 52 FR 46595, Dec. 9, 1987, as amended by T.D. ATF-271, 53 
FR 17559, May 17, 1988; T.D. ATF-379, 61 FR 31427, June 20, 1996]



Sec. 250.310  Records.

    (a) General. Every person intending to file claim for drawback on 
eligible articles brought into the United States from the Virgin Islands 
shall keep permanent records of the data elements required by this 
section. Such records shall be maintained at the business premises for 
which the claim is filed and shall be available for inspection by any 
ATF officer during business hours.
    (b) Details of records. Each person intending to claim drawback on 
eligible articles brought into the United States shall maintain 
permanent records showing the following data:
    (1) The name, description, quantity, and formula number of each such 
article.
    (2) The alcohol content of each such article.
    (3) Name and address of the manufacturer and shipper, and date of 
entry into the United States.
    (4) Evidence of taxpayment of distilled spirits in accordance with 
paragraph (e) of this section.
    (c) Form of record. No particular form of record is prescribed, but 
the data required to be shown shall be readily ascertainable from the 
records kept by the drawback claimant.
    (d) Evidence of taxpayment of distilled spirits. Evidence of 
taxpayment of eligible articles (such as Customs Forms 7501 and 7505 
receipted to indicate payment of tax) shall be maintained as evidence of 
taxpayment to support information required to be furnished in the 
supporting data filed with a claim.
    (e) Retention of records. Each drawback claimant shall retain for a 
period of not less than three years all records required by this 
subpart, all commercial invoices or shipping documents, and all bills of 
lading received evidencing receipt and tax determination of the spirits. 
In addition, a copy of each approved formula returned to the 
manufacturer of eligible articles shall be retained for not less than 
three years from the date he files his last claim for drawback under the 
formula. The records, forms, and formulas shall be readily available 
during regular business hours for examination by ATF officers.

(Approved by the Office of Management and Budget under control number 
1512-0494)

[[Page 74]]



               Subpart P--Requirements for Liquor Bottles

    Authority: Sec. 5301, 72 Stat. 1374; 26 U.S.C. 5301.

    Source: T.D. 6954, 33 FR 6818, May 4, 1968, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 250.311  Scope of subpart.

    The provisions of this subpart shall apply only to liquor bottles 
having a capacity of 200 ml. or more except where expressly applied to 
liquor bottles of less than 200 ml. capacity.

[T.D. 6954, 33 FR 6818, May 4, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-34, 41 FR 46864, Oct. 26, 1976]



Sec. 250.312  Standards of fill.

    Distilled spirits brought into the United States from Puerto Rico or 
the Virgin Islands in containers of 1 gallon (3.785 liters) or less for 
sale shall be in liquor bottles, including liquor bottles of less than 
200 ml capacity, which conform to the applicable standards of fill 
provided in Sec. 5.47 or Sec. 5.47a of this chapter. Empty liquor 
bottles, including liquor bottles of less than 200 ml capacity, which 
conform to the provisions of subpart E of part 5 or part 19 of this 
chapter, may be brought into the United States for packaging distilled 
spirits as provided in part 19 of this chapter.

[T.D. ATF-34, 41 FR 46864, Oct. 26, 1976, as amended by T.D. ATF-62, 44 
FR 71718, Dec. 11, 1979]



Sec. 250.314  Distinctive liquor bottles.

    (a) Application. Liquor bottles of distinctive shape or design, 
including bottles of less than 200 ml. capacity, may be brought into the 
United States from Puerto Rico or the Virgin Islands by an importer 
(filled bottles) or a bottler (empty bottles). For filled bottles, the 
importer shall submit ATF Form 5100.31 to the Director for approval 
prior to bringing such bottles into the United States. For empty 
bottles, the bottler shall obtain approval from the Director on ATF Form 
5100.31 prior to using the bottles. The importer or bottler, as 
applicable, shall certify as to the total capacity of a representative 
sample bottle before closure (expressed in milliliters) on each copy of 
the form. In addition, the applicant shall affix a readily legible 
photograph (both front and back of the bottle) to the front of each copy 
of ATF Form 5100.31, along with the label(s) to be used on the bottle. 
The applicant shall not submit an actual bottle or an authentic model 
unless specifically requested to do so.
    (b) Approval. Properly submitted ATF Forms 5100.31 to bring 
distinctive liquor bottles (filled) into the United States from Puerto 
Rico or the Virgin Islands, or, properly submitted ATF Forms 5100.31 to 
use distinctive liquor bottles (empty) which have been brought into the 
United States from Puerto Rico or the Virgin Islands, shall be approved 
provided such bottles are found by the Director to--
    (1) Meet the requirements of 27 CFR part 5;
    (2) Be distinctive;
    (3) Be suitable for their intended purpose;
    (4) Not jeopardize the revenue; and
    (5) Not be deceptive to the consumer.

The applicant shall keep a copy of the approved ATF Form 5100.31, 
including an approved photograph (both front and back) of the 
distinctive liquor bottle, on file at his premises. If ATF Form 5100.31 
is disapproved, the applicant shall be notified of the Director's 
decision and the reasons therefor. The applicant importer is responsible 
for furnishing a copy of the approved ATF Form 5100.31, including a 
photograph of the distinctive liquor bottle, to Customs officials at 
each affected port of entry where the merchandise is examined.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-114, 47 FR 43950, Oct. 5, 1982, as amended by T.D. ATF-242, 51 
FR 39526, Oct. 29, 1986]



Sec. 250.315  [Reserved]



Sec. 250.316  Bottles not constituting approved containers.

    The Director is authorized to disapprove any bottle, including a 
bottle of less than 200 ml. capacity, for use as a liquor bottle which 
he determines to be deceptive. The Customs officer at

[[Page 75]]

the port of entry shall deny entry of any such bottle containing 
distilled spirits upon advice from the Director that such bottle is not 
and approved container for distilled spirits for consumption in the 
United States.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-114, 47 FR 43950, Oct. 5, 1982]



Sec. 250.317  Bottles to be used for display purposes.

    Empty liquor bottles may be brought into the United States and may 
be furnished to liquor dealers for display purposes, provided each 
bottle is marked to show that it is to be used for such purpose. Any 
paper strip used to seal the bottle shall be of solid color and without 
design or printing, except that a border or a design, formed entirely of 
the legend ``not genuine--for display purposes only'' is permissible. 
Records shall be kept of the receipt and disposition of such bottles, 
showing the names and addresses of consignees, dates of shipment, and 
size, quantity, and description of bottles.



Sec. 250.318  Liquor bottles denied entry.

    Filled liquor bottles not conforming to the provisions of this 
subpart shall be denied entry into the United States: Provided, That, 
upon letterhead application, in triplicate, the regional director 
(compliance) of the region in which the port of entry is situated may, 
in nonrecurring cases, authorize the release from customs custody of 
distilled spirits in bottles, except those coming under the provisions 
of Sec. 250.316, which, through unintentional error, do not conform to 
the provisions of this subpart, if he finds that such release will not 
afford jeopardy to the revenue.



Sec. 250.319  Used liquor bottles.

    The Director may pursuant to letterhead application filed in 
triplicate, authorize an importer to receive liquor bottles assembled 
for him as provided in Sec. 194.263 of this chapter. Used liquor bottles 
so received may be stored at any suitable location pending return to 
Puerto Rico or the Virgin Islands. Records shall be kept of the receipt 
and disposition of such bottles.

[T.D. 6954, 33 FR 6818, May 4, 1968, as amended by T.D. 7006, 34 FR 
2250, Feb, 15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]



                   Subpart Q--Miscellaneous Provisions



Sec. 250.331  Alternate methods or procedures.

    (a) Application. A person bringing liquors into the United States 
from Puerto Rico or the Virgin Islands who desires to use an alternate 
method or procedure in lieu of a method or procedure prescribed by this 
part shall file application, in triplicate, with the regional director 
(compliance) of the region in which his place of business is located. If 
such person has several places of business at which he desires to use 
such alternate method or procedure, a separate application shall be 
submitted for each. Each application shall:
    (1) Specify the name, address, and permit number of the person to 
which it relates;
    (2) State the purpose for which filed; and
    (3) Specifically describe the alternate method or procedure and set 
forth the reasons therefor.

No alternate method or procedure relating to the assessment, payment, or 
collection of tax shall be authorized under this paragraph.
    (b) Approval. When an application for use of an alternate method or 
procedure is received, the regional director (compliance) shall 
determine whether the approval thereof would unduly hinder the effective 
administration of this part or would result in jeopardy to the revenue. 
The regional director (compliance) shall forward two copies of the 
application to the Director, together with a report of his findings and 
his recommendation. The Director, may approve the alternate method or 
procedure if he finds that:
    (1) Good cause has been shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the

[[Page 76]]

specifically prescribed method or procedure, and affords equivalent 
security to the revenue; and
    (3) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in any increase in cost to the 
Government or hinder the effective administration of this part.

No alternate method or procedure shall be used until approval has been 
received from the Director. Authorization for the alternate method or 
procedure may be withdrawn whenever in the judgment of the Director, the 
revenue is jeopardized or the effective administration of this part is 
hindered by the continuation of such authorization.

(Approved by the Office of Management and Budget under control number 
1512-0352)

[T.D. ATF-2, 37 FR 22739, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984]



PART 251--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
251.1  Imported distilled spirits, wines, and beer.
251.2  Forms prescribed.

                         Subpart B--Definitions

251.11  Meaning of terms.

                 Subpart C--Special (Occupational) Taxes

251.30  Special (occupational) tax.
251.31  Warehouse receipts covering distilled spirits.

Subpart D--Tax on Imported Distilled Spirits, Wines, Beer, and Imported 
                  Perfumes Containing Distilled Spirits

                     Distilled Spirits and Perfumes

251.40  Distilled spirits.
251.40a  Computation of effective tax rate.
251.41  Perfumes containing distilled spirits.

                                  Wines

251.42  Wines.
251.42a  Still wines containing carbon dioxide.

        Liqueurs, Cordials, and Other Compounds and Preparations

251.43  Liqueurs, cordials, and similar compounds.
251.44  Other compounds and preparations.

                                  Beer

251.45  Rate of tax.
251.46  Computation of tax.

                  Collection of Internal Revenue Taxes

251.48  Imported distilled spirits, wines, and beer.
251.48a  Payment of tax by electronic fund transfer.

        Exemption of Certain Samples From Internal Revenue Taxes

251.49  Commercial samples of alcoholic beverages.

                     Subpart E--General Requirements

       Permit for Importation of Distilled Spirits, Wines and Beer

251.55  Federal Alcohol Administration Act permit.

               Packaging and Marking of Distilled Spirits

251.56  Distilled spirits containers of a capacity of not more than 1 
          gallon.
251.57  Containers in excess of 1 gallon.

                      Labeling of Distilled Spirits

251.58  Containers of 1 gallon (3.785 liters) or less.

                 Marking and Labeling of Wines and Beer

251.59  Wines.
251.60  Beer.

              Closures for Containers of Distilled Spirits

251.61  Containers of distilled spirits to bear closures.
251.62  Affixing closures.

                               Exemptions

251.74  Exemption from requirements pertaining to marks, bottles, and 
          labels.
251.75  Samples of distilled spirits, wine, and beer for quality control 
          purposes.

              Wine and Flavors Content of Distilled Spirits

251.76  Approval and certification of wine and flavors content.
251.77  Standard effective tax rate.

Subparts F-G [Reserved]

[[Page 77]]

           Subpart H--Importation of Distilled Spirits in Bulk

251.120  Persons authorized to receive distilled spirits imported in 
          bulk.
251.121  Containers.

                Subpart I--Importer's Records and Reports

251.130-251.132  [Reserved]

                  Record and Report of Imported Liquors

251.133  General requirements.
251.134  Proprietors of qualified premises.

               Filing and Retention of Records and Reports

251.136  Filing.
251.137  Retention.

                              Other Records

251.138  Transfer record.
251.139  Package gauge record.

Subparts J-K [Reserved]

Subpart L--Transfer of Distilled Spirits From Customs Custody to Bonded 
                   Premises of Distilled Spirits Plant

251.171  General provisions.
251.172  Preparation of transfer record and package gauge record.
251.173  Inspection and release.
251.174  Tank cars and tank trucks to be sealed.
251.175  Receipt by consignee.

Subpart M--Withdrawal of Imported Distilled Spirits From Customs Custody 
                Free of Tax For Use of the United States

251.181  General.
251.182  Application and permit, Form 5150.33.
251.183  Use of permit, Form 5150.33.
251.184  Entry documents.
251.185  Customs release.

               Subpart N--Requirements for Liquor Bottles

251.201  Scope of subpart.
251.202  Standards of fill.
251.204  Distinctive liquor bottles.
251.205  [Reserved]
251.206  Bottles not constituting approved containers.
251.207  Bottles to be used for display purposes.
251.208  Liquor bottles denied entry.
251.209  Used liquor bottles.

                   Subpart O--Miscellaneous Provisions

251.221  Alternate methods or procedures.

    Authority: 5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C. 5001, 
5007, 5008, 5010, 5041, 5051, 5054, 5061, 5111, 5112, 5114, 5121, 5122, 
5124, 5201, 5205, 5207, 5232, 5273, 5301, 5313, 5555, 6302, 7805.

    Source: 20 FR 3561, May 21, 1955; unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.

    Cross Reference: For regulations with respect to distilled spirits, 
wines, and beer arriving in the United States from Puerto Rico and the 
Virgin Islands, see part 250 of this subchapter.



                     Subpart A--Scope of Regulations



Sec. 251.1  Imported distilled spirits, wines, and beer.

    This part, ``Importation of Distilled Spirits, Wines, and Beer'', 
contains procedural and substantive requirements relative to the 
importation of distilled spirits, wines, and beer into the United States 
from foreign countries including special (occupational) and commodity 
taxes, permits, marking, branding, closing and labeling of containers 
and packages, and records and reports.
    Note: Distilled spirits, wines, and beer arriving in the United 
States from Puerto Rico and the Virgin Islands are governed by the 
provisions of part 250 of this chapter.

[T.D. ATF-206, 50 FR 23955, June 7, 1985]



Sec. 251.2  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part, including reports, returns, and records. All of the 
information called for in each form shall be furnished as indicated by 
the headings on the form and the instructions on or pertaining to the 
form. In addition, information called for in each form shall be 
furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46921, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5963, Feb. 27, 1987; T.D. ATF-372, 61 FR 20725, May 8, 1996]

[[Page 78]]



                         Subpart B--Definitions



Sec. 251.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
section. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not enumerated which are in the same general class.
    ATF Officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) duly authorized to perform any function 
relating to the administration or enforcement of this part.
    Beer. Beer, ale porter, stout, and other similar fermented beverages 
(including sake or similar products) of any name or description 
containing one-half of 1 percent or more of alcohol by volume, brewed or 
produced from malt, wholly or in part, or from any substitute therefor.
    Bonded premises--distilled spirits plant. The premises of a 
distilled spirits plant, or part thereof, on which distilled spirits 
operations defined in 26 U.S.C. 5002 are authorized to be conducted.
    Bulk container. Any container having a capacity of more than 1 
gallon.
    Bulk distilled spirits. The term ``bulk distilled spirits'' means 
distilled spirits in a container having a capacity in excess of 1 
gallon.
    CFR. The Code of Federal Regulations.
    Class 8 Customs bonded warehouse. A class 8 customs bonded warehouse 
established under the provisions of Customs Regulations (19 CFR, chapter 
I).
    Customs officer. Any officer of the Customs Service or any 
commissioned, warrant, or petty officer of the Coast Guard, or any agent 
or other person authorized by law or designated by the Secretary of the 
Treasury to perform any duties of an officer of the Customs Service.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Distilled spirits or spirits. That substance known as ethyl alcohol, 
ethanol, or spirits of wine, and all mixtures or dilutions thereof, from 
whatever source or by whatever process produced, including alcohol, 
whisky, brandy, gin, rum, and vodka, but not including wine as defined 
in this subpart.
    Distilled spirits plant. An establishment qualified under the 
provisions of part 19 of this chapter for the production, storage, or 
processing of spirits, or for authorized combinations of such 
operations.
    District director of customs. The district director of customs at a 
headquarters port of the district (except the district of New York, 
N.Y.); the area directors of customs in the district of New York, N.Y.; 
and the port director at a port not designated as a headquarters port.
    Effective tax rate. The net tax rate after reduction for any credit 
allowable under 26 U.S.C. 5010 for wine and flavor content at which the 
tax imposed on distilled spirits by 26 U.S.C. 5001 is paid or 
determined.
    Eligible flavor. A flavor which:
    (1) Is of a type that is eligible for drawback of tax under 26 
U.S.C. 5134,
    (2) Was not manufactured on the premises of a distilled spirits 
plant, and
    (3) Was not subjected to distillation on distilled spirits plant 
premises such that the flavor does not remain in the finished product.
    Eligible wine. Wine on which tax would be imposed by paragraph (1), 
(2), or (3) of 26 U.S.C. 5041(b) but for its removal to distilled 
spirits plant premises and which has not been subject to distillation at 
a distilled spirits plant after receipt in bond.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.
    Importer. Any person who imports distilled spirits, wines, or beer 
into the United States.
    Kind. As applied to spirits, kind shall mean class and type as 
prescribed in 27 CFR part 5. As applied to wines, kind shall mean the 
classes and types of wines as prescribed in 27 CFR part 4.

[[Page 79]]

    Liquor bottle. A bottle made of glass or earthenware, or of other 
suitable material approved by the Food and Drug Administration, which 
has been designed or is intended for use as a container for distilled 
spirits for sale for beverage purposes and which has been determined by 
the Director to adequately protect the revenue.
    Person. An individual, a trust, an estate, a partnership, an 
association, a company, or a corporation.
    Proof. The ethyl alcohol content of a liquid at 60 degrees 
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
    Proof gallon. A gallon of liquid at 60 degrees Fahrenheit which 
contains 50 percent by volume of ethyl alcohol having a specific gravity 
of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees 
Fahrenheit as unity, or the alcoholic equivalent thereof.
    Region. A Bureau of Alcohol, Tobacco and Firearms Region.
    Regional Director (compliance). The principal ATF regional official 
responsible for administering regulations in this part.
    United States. ``United States'' includes only the States and the 
District of Columbia.
    U.S.C. The United States Code.
    Wine. (a) Still wine, including vermouth or other aperitif wine, 
artificial or imitation wines or compounds sold as still wines, 
champagne or sparkling wine, and artificially carbonated wine, and (b) 
flavored or sweetened fortified or unfortified wines, by whatever name 
sold or offered for sale, containing not over 24 percent alcohol by 
volume.

(68A Stat. 917, as amended (26 U.S.C. 7805); 49 Stat. 981, as amended 
(27 U.S.C. 205); 26 U.S.C. 7805 (68A Stat. 917, as amended), and in 27 
U.S.C. 205 (49 Stat. 981, as amended))

[T.D. ATF-48, 43 FR 13552, Mar. 31, 1978, as amended by T.D. ATF-50, 43 
FR 37180, Aug. 22, 1978; 44 FR 55853, Sept. 28, 1979; T.D. ATF-62, 44 FR 
71718, Dec. 11, 1979; T.D. ATF-114, 47 FR 43950, Oct. 5, 1982; T.D. ATF-
198, 50 FR 8555, Mar. 1, 1985; T.D. ATF-206, 50 FR 23955, June 7, 1985; 
T.D. ATF-251, 52 FR 19339, May 22, 1987; T.D. ATF-297, 55 FR 18069, Apr. 
30, 1990; T.D. ATF-398, 63 FR 44784, Aug. 21, 1998]



                 Subpart C--Special (Occupational) Taxes



Sec. 251.30  Special (occupational) tax.

    Importers engaged in the business of selling, or offering for sale, 
distilled spirits, wines or beer are subject to the provisions of part 
194 of this chapter relating to special (occupational) taxes. Part 194 
requires that the special tax return, Form 5630.5, with payment of the 
tax, shall be filed with ATF in accordance with the instruction on the 
form, before commencing business. Subsequently, Form 5630.5 with tax 
shall be filed each year on or before July 1, as long as the proprietor 
continues in business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340 as amended, 1343 as amended, 
1344 as amended (26 U.S.C. 5111, 5112, 5121, 5122))

[T.D. ATF-70, 45 FR 33981, May, 21, 1980, as amended by T.D. ATF-251, 52 
FR 19339, May 22, 1987]



Sec. 251.31  Warehouse receipts covering distilled spirits.

    Since the sale of warehouse receipts for distilled spirits is 
equivalent to the sale of distilled spirits, every person engaged in 
business as an importer of distilled spirits, who sells, or offers for 
sale, warehouse receipts for distilled spirits stored in customs bonded 
warehouses, or elsewhere, incurs liability to special tax as a dealer in 
liquors at the place where the warehouse receipts are sold or offered 
for sale, and must file return and pay occupational tax as provided in 
Sec. 251.30.

(68A Stat. 618, 620, 621; 26 U.S.C. 5111, 5112, 5121, 5122)



Subpart D--Tax On Imported Distilled Spirits, Wines, Beer, and Imported 
                  Perfumes Containing Distilled Spirits

                     Distilled Spirits and Perfumes



Sec. 251.40  Distilled spirits.

    (a) A tax is imposed on all distilled spirits in customs bonded 
warehouses or imported into the United States at the rate prescribed by 
26 U.S.C. 5001 on each proof gallon and a proportionate tax at a like 
rate on all fractional parts of each proof gallon. All products

[[Page 80]]

of distillation, by whatever name known, which contain distilled 
spirits, are considered to be distilled spirits and are taxed as such. 
The tax will be determined at the time of importation, or, if entered 
into bond, at the time of withdrawal therefrom.
    (b) A credit against the tax imposed on distilled spirits by 26 
U.S.C. 5001 is allowable under 26 U.S.C. 5010 on each proof gallon of 
alcohol derived from eligible wine or from eligible flavors which do not 
exceed 2\1/2\ percent of the finished product on a proof gallon basis. 
The credit is allowable at the time the tax is payable as if it 
constituted a reduction in the rate of tax.
    (c) Where credit against the tax is desired, the person liable for 
the tax shall establish an effective tax rate in accordance with 
Sec. 251.40a. The effective tax rate established will be applied to each 
entry.

(Approved by the Office of Management and Budget under control number 
1512-0352.)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001); 
Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); 
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18069, Apr. 30, 1990]



Sec. 251.40a  Computation of effective tax rate.

    (a) The proprietor shall compute the effective tax rate for 
distilled spirits containing eligible wine or eligible flavors as the 
ratio of the numerator and denominator as follows:
    (1) The numerator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product 
(exclusive of distilled spirits derived from eligible flavors), 
multiplied by the tax rate prescribed by 26 U.S.C. 5001;
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by the tax rate prescribed by 26 U.S.C. 5041(b)(1), (2), or 
(3), as applicable; and
    (iii) The proof gallons of all distilled spirits derived from 
eligible flavors used in the product, multiplied by the tax rate 
prescribed by 26 U.S.C. 5001, but only to the extent that such distilled 
spirits exceed 2\1/2\% of the denominator prescribed in paragraph (a)(2) 
of this section.
    (2) The denominator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product, 
including distilled spirits derived from eligible flavors; and
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by twice the percentage of alcohol by volume of each, divided 
by 100.
    (b) In determining the effective tax rate, quantities of distilled 
spirits, eligible wine, and eligible flavors will be expressed to the 
nearest tenth of a proof gallon. The effective tax rate may be rounded 
to as many decimal places as the proprietor deems appropriate, provided 
that, such rate is expressed no less exactly than the rate rounded to 
the nearest whole cent, and the effective tax rates for all products 
will be consistently expressed to the same number of decimal places. In 
such case, if the number is less than five it will be dropped; if it is 
five or over, a unit will be added.
    (c) The following is an example of the use of the formula.
---------------------------------------------------------------------------

    \1\ Proof gallons by which distilled spirits derived from eligible 
flavors exceed 2\1/2\% of the total proof gallons in the batch (100.9 - 
(2\1/2\%)  x  3.371.8 = 16.6).

                              BATCH RECORD
Distilled spirits..............................    2249.1 proof gallons.
Eligible wine (14% alcohol by volume)..........     2265.0 wine gallons.
Eligible wine (19% alcohol by volume)..........     1020.0 wine gallons.
Eligible flavors...............................     100.9 proof gallons.


[[Page 81]]

[GRAPHIC] [TIFF OMITTED] TC05OC91.033


(Approved by the Office of Management and Budget under control number 
1512-0352)

(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18069, Apr. 30, 1990, as amended by T.D. ATF-307, 
55 FR 52742, Dec. 21, 1990]



Sec. 251.41  Perfumes containing distilled spirits.

    Perfumes imported into the United States containing distilled 
spirits are subject to the internal revenue tax at the rate prescribed 
by 26 U.S.C. 5001 per wine gallon, and a proportionate tax at a like 
rate on all fractional parts of such wine gallon.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))

[T.D. 6388, 24 FR 4823, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55853, Sept. 28, 1979]

                                  Wines



Sec. 251.42  Wines.

    All wines (including imitation, substandard, or artificial wine, and 
compounds sold as wine) having not in excess of 24 percent of alcohol by 
volume, in customs bonded warehouse or imported into the United States 
are subject to an internal revenue tax at the rates prescribed by law; 
such tax to be determined at the time of removal from customs custody 
for consumption or sale. The tax is imposed on each wine gallon and at a 
like rate on fractional parts of a wine gallon. Fractions of less than 
one-tenth gallon shall be converted to the nearest one-tenth gallon, and 
five-hundredths gallon shall be converted to the next full one-tenth 
gallon. All wines containing more than 24 percent of alcohol by volume 
shall be classed as distilled spirits and shall be taxed accordingly.

(72 Stat. 1331, as amended; 26 U.S.C. 5041)

[T.D. 6644, 28 FR 3165, Apr. 2, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 251.42a  Still wines containing carbon dioxide.

    Still wines may contain not more than 0.392 gram of carbon dioxide 
per 100 milliliters of wine; except that a tolerance to this maximum 
limitation, not to exceed 0.009 gram of carbon dioxide per 100 
milliliters of wine, will be allowed where the amount of carbon dioxide 
in excess of 0.392 gram per 100 milliliters of wine was due to 
mechanical variations which could not be completely controlled under 
good commercial practices. Such tolerance will not be allowed where it 
is found that the limitation of 0.392 gram of carbon dioxide per 100 
milliliters of wine is continuously or intentionally exceeded.

[T.D. ATF-13, 40 FR 4419, Jan. 30, 1975. Redesignated at 40 FR 16835, 
Apr. 15, 1975]

        Liqueurs, Cordials, and Other Compounds and Preparations



Sec. 251.43  Liqueurs, cordials, and similar compounds.

    A tax is imposed by 26 U.S.C. 5001 on all liqueurs, cordials, and 
similar compounds, containing distilled spirits, in a customs bonded 
warehouse or imported into the United States at the rate prescribed in 
such section on each proof gallon, and a proportionate tax at a like 
rate on all fractional parts of such proof gallon. The tax shall be 
determined at the time of importation, or, if entered into bond, at the 
time of withdrawal therefrom. Fortified or unfortified wines, containing 
not over 24 percent alcohol by volume, to which sweetening or flavoring 
materials, but no distilled spirits, have been added are

[[Page 82]]

not classified as liqueurs, cordials, or similar compounds, but are 
considered to be flavored wines only and are subject to internal revenue 
tax at the rates applicable to wines.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1331, as amended 
(26 U.S.C. 5001, 5041))

[T.D. ATF-62, 44 FR 71718, Dec. 11, 1979]



Sec. 251.44  Other compounds and preparations.

    Compounds and preparations, other than those specified in 
Sec. 251.43 containing distilled spirits, which are fit for beverage 
purposes, in customs bonded warehouse or imported into the United States 
are subject to internal revenue tax at the rates applicable to distilled 
spirits. Compounds and preparations, containing fortified or unfortified 
wine, but no distilled spirits, which are fit for beverage purposes and 
which are sold as wine, are subject to internal revenue tax at the rates 
applicable to wines.

(68A Stat. 595, as amended, 609, as amended; 26 U.S.C. 5001, 5041)

                                  Beer



Sec. 251.45  Rate of tax.

    A tax is imposed by 26 U.S.C. 5051, on all beer imported into the 
United States, at the rate prescribed in such section, for every barrel 
containing not more than 31 gallons, and at a like rate for any other 
quantity or for fractional parts of a barrel. The tax on beer shall be 
determined at the time of importation, or, if entered into customs 
custody, at the time of removal from such custody.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended 
(26 U.S.C. 5051, 5054))

[T.D. 6644, 28 FR 3165, Apr. 2, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55853, Sept. 28, 1979]



Sec. 251.46  Computation of tax.

    The tax on imported beer shall be computed on the basis of the 
actual quantity in a container, at the rate prescribed by law.

(72 Stat. 1333, as amended; 26 U.S.C. 5051)

[T.D. 6644, 28 FR 3165. Apr. 2, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975]

                  Collection of Internal Revenue Taxes



Sec. 251.48  Imported distilled spirits, wines, and beer.

    Internal revenue taxes payable on imported distilled spirits, 
including perfumes containing distilled spirits, and on wines and beer, 
are collected, accounted for, and deposited as internal revenue 
collections by directors of customs in accordance with customs 
requirements: Provided, That the taxes on distilled spirits withdrawn 
from customs custody without payment of tax under the provisions of 
subpart L and thereafter withdrawn from bonded premises of a distilled 
spirits plant subject to tax shall be collected and paid under the 
provisions of part 19 of this chapter.

(72 Stat. 1314, 1366; 26 U.S.C. 5001, 5232)

[20 FR 3561, May 21, 1955, as amended by T.D. 6477, 25 FR 6204, July 1, 
1960; T.D. 7006, 34 FR 2250, Feb. 15, 1969. Redesignated at 40 FR 16835, 
Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 251.48, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 251.48a  Payment of tax by electronic fund transfer.

    (a) Each importer who was liable, during a calendar year, for a 
gross amount equal to or exceeding five million dollars in distilled 
spirits taxes combining tax liabilities incurred under this part and 
parts 19 and 250 of this chapter, a gross amount equal to or exceeding 
five million dollars in wine taxes combining tax liabilities incurred 
under this part and parts 240 and 250 of this chapter, or a gross amount 
equal to or exceeding five million dollars in beer taxes combining tax 
liabilities incurred under this part and parts 25 and 250 of this 
chapter, shall use a commercial bank in making payment by electronic 
fund transfer (EFT), as defined in paragraph (c) of

[[Page 83]]

this section, of such taxes during the succeeding calendar year. Payment 
of such taxes by cash, check, or money order is not authorized for an 
importer who is required, by this section, to make remittances by EFT. 
For purposes of this section, the dollar amount of tax liability is to 
be summarized separately for distilled spirits taxes, wine taxes, or 
beer taxes, and is defined as the gross tax liability on all taxable 
withdrawals from premises in the United States and importations 
(including products of the same tax class brought into the United States 
from Puerto Rico or the Virgin Islands) during the calendar year, 
without regard to any drawbacks, credits, or refunds, for all premises 
from which such activities are conducted by the taxpayer.
    (b) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (c) Electronic fund transfer or EFT means any transfer of funds, 
other than a transaction originated by check, draft, or similar paper 
instrument, which is initiated through an electronic terminal, 
telephonic instrument, or computer of magnetic tape, so as to order, 
instruct, or authorize a financial institution to either debit or credit 
an account, in accordance with procedures established by the U.S. 
Customs Service.
    (d) An importer who is required by this section to make remittances 
by EFT shall make the EFT remittance in accordance with the requirements 
of the U.S. Customs Service.

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-245, 52 FR 533, Jan. 7, 1987]

        Exemption of Certain Samples From Internal Revenue Taxes



Sec. 251.49  Commercial samples of alcoholic beverages.

    Samples of distilled spirits, beer, and wine, to be used in the 
United States by persons importing alcoholic beverages in commercial 
quantities, are, subject to the limitations in this section, exempt from 
the payment of any internal revenue tax imposed on, or by reason of, 
importation. This exemption applies only to samples to be used for 
soliciting orders for products of foreign countries. In no case shall 
this exemption apply to more than one sample of each alcoholic beverage 
product admitted during any calendar quarter for the use of each such 
person. No sample of beer shall contain more than 8 ounces, no sample of 
wine shall contain more than 4 ounces, and no sample of distilled 
spirits shall contain more than 2 ounces.

(76 Stat. 72; 19 U.S.C. 1202)

[T.D. 6300, 23 FR 5168, July 8, 1958; T.D. ATF-2, 37 FR 22740, Oct. 21, 
1972. Redesignated at 40 FR 16835, Apr. 15, 1975]



                     Subpart E--General Requirements

       Permit for Importation of Distilled Spirits, Wines and Beer



Sec. 251.55  Federal Alcohol Administration Act permit.

    Under the Federal Alcohol Administration Act and the regulations 
issued pursuant thereto (Regulations 1, 27 CFR part 1), any person 
except an agency of a State or political subdivision thereof, or any 
officer or employee of any such agency, intending to engage in the 
business of importing distilled spirits, wines or beer for nonindustrial 
use is required to procure a permit (Form 1631) therefor.

(Sec. 3, 49 Stat. 978, as amended; 27 U.S.C. 203)

[[Page 84]]

               Packaging and Marking of Distilled Spirits



Sec. 251.56  Distilled spirits containers of a capacity of not more than 1 gallon.

    Bottled distilled spirits imported into the United States for sale 
shall be bottled in liquor bottles which conform to the requirements of 
subpart N of this part and part 5 of this chapter. Empty bottles 
imported for the packaging of distilled spirits shall conform to the 
requirements of subpart N of this part. (For Customs requirements as to 
marking, see 19 CFR parts 11 and 12.)

[T.D. ATF-206, 50 FR 23955, June 7, 1985]



Sec. 251.57  Containers in excess of 1 gallon.

    Imported containers of distilled spirits in excess of 1 gallon are 
required to be marked in accordance with customs regulations (19 CFR 
parts 11 and 12).

[20 FR 3561, May 21, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-206, 50 FR 23955, June 7, 1985]

                      Labeling of Distilled Spirits



Sec. 251.58  Containers of 1 gallon (3.785 liters) or less.

    Labels on imported containers of distilled spirits, and on 
containers of imported distilled spirits bottled in customs custody, for 
sale at retail, are required to be covered by a certificate of label 
approval ATF Form 5100.31 issued pursuant to part 5 of this chapter. 
Containers of imported distilled spirits bottled after taxpayment and 
withdrawal from customs custody are required to be covered by a 
certificate of label approval or a certificate of exemption from label 
approval ATF Form 5100.31 issued pursuant to part 5 of this chapter. 
When distilled spirits are to be labeled under a certificate of 
exemption from label approval, the labels affixed to containers are 
required to conform to the provisions of part 19 of this chapter.

[T.D. 6954, 33 FR 6818, May 4, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 251.58, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

                 Marking and Labeling of Wines and Beer



Sec. 251.59  Wines.

    All imported wines containing not less than 7 percent and not more 
than 24 percent of alcohol by volume are required to be packaged, 
marked, branded, and labeled in conformity with the Federal Alcohol 
Administration Act and regulations promulgated thereunder (Regulations 
4, 27 CFR part 4), prior to their removal from customs custody. 
Containers of imported wine bottled or packaged after taxpayment and 
withdrawal from customs custody are required to be covered by a 
certificate of label approval or a certificate of exemption from label 
approval on ATF Form 5100.31 issued pursuant to the Federal Alcohol 
Administration Act and regulations promulgated thereunder (Regulations 
4, 27 CFR part 4). Imported containers of wine are required also to be 
marked, branded and labeled in accordance with customs regulations (19 
CFR parts 11 and 12).

[20 FR 3561, May 21, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975 
and amended by T.D. ATF-242, 51 FR 39526, Oct. 29, 1986]



Sec. 251.60  Beer.

    All imported beer is required to be released from customs custody in 
conformity with the Federal Alcohol Administration Act and regulations 
thereunder. The attention of all concerned is directed, in this 
connection, to the provisions of Regulations 7 (27 CFR part 7) relating 
to the labeling and advertising of malt beverages, issued under the 
Federal Alcohol Administration Act. Imported containers of beer are 
required to be marked and labeled in accordance with customs regulations 
(19 CFR parts 11 and 12).

              Closures for Containers of Distilled Spirits



Sec. 251.61  Containers of distilled spirits to bear closures.

    No person shall transport, buy, possess, or sell, or transfer any 
imported distilled spirits in containers of 1 gallon (3.785 liters) or 
less, unless the immediate container thereof has a closure

[[Page 85]]

or other device affixed in accordance with the provisions of this part.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23955, June 7, 1985]



Sec. 251.62  Affixing closures.

    Closures or other devices on containers of imported distilled 
spirits having a capacity of 1 gallon (3.785 liters) or less shall be 
affixed so as to leave a portion of the closure or other device 
remaining on the container when it is opened. In addition, the closures 
or other devices shall be constructed in such a manner as to require 
that they be broken to gain access to the contents of the containers.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23955, June 7, 1985]

                               Exemptions



Sec. 251.74  Exemption from requirements pertaining to marks, bottles, and labels.

    The provisions of this part relating to the labeling of containers 
as prescribed by 27 CFR part 5 are not applicable to imported distilled 
spirits (a) not for sale or for any other commercial purpose whatever; 
(b) on which no internal revenue tax is required to be paid or 
determined on or before withdrawal from customs custody; (c) for use as 
ship stores; or (d) for personal use. Samples of distilled spirits, 
other than those provided for in Secs. 251.49 and 251.75, imported for 
any purpose are not exempt from the requirements pertaining to marks, 
bottles, and labels. Samples of wine and beer brought into the United 
States pursuant to Sec. 251.49 are exempt from the requirements 
pertaining to marks, bottles, and labels. Samples of wine and beer 
brought into the United States pursuant to Sec. 251.49 are exempt from 
the labeling requirements of 27 CFR parts 4 and 7, respectively. 
Exemptions from the requirements that imported distilled spirits, wines, 
and beer be marked to indicate the country of origin are set forth in 
customs regulations (19 CFR part 11).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1374, as amended 
(26 U.S.C. 5205, 5301))

[T.D. ATF-206, 50 FR 23956, June 7, 1985]



Sec. 251.75  Samples of distilled spirits, wine, and beer for quality control purposes.

    Samples of distilled spirits, wine, and beer in containers of a 
capacity of not more than 1.75 liters, imported solely for quality 
control purposes (laboratory testing and analysis) and not for sale or 
for use in the manufacture or production of any article for sale, shall 
be exempt from any requirements relating to marks, bottles, labels, and 
standards of fill. Samples imported for quality control purposes shall 
not be exempt from the payment of any internal revenue tax imposed on, 
or by reason of, importation.

[T.D. ATF-198, 50 FR 8557, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23955, June 7, 1985]

              Wine and Flavors Content of Distilled Spirits



Sec. 251.76  Approval and certification of wine and flavors content.

    (a) Any person who, after December 1, 1990, imports into the United 
States distilled spirits on which the tax is to be paid or determined at 
an effective tax rate based in whole, or in part, on the alcohol content 
derived from eligible wine or eligible flavors which have not been 
previously approved on ATF Form 5530.5 (1678) shall, before the first 
tax determination at that rate, request and receive a statement of 
eligibility for each wine or flavor to be used in the computation of the 
effective tax rate.
    (b) To receive a statement of eligibility, the importer shall cause 
to be submitted to the ATF National Laboratory, 1401 Research Boulevard, 
Attn: NBA, Rockville, MD 20850, the following:
    (1) An 8-ounce sample of each distilled spirits, wine and flavor 
contained in the product; and

[[Page 86]]

    (2) A statement of composition listing--
    (i) For wine, the kind (class and type) and percentage of alcohol by 
volume; and
    (ii) For flavors, the name and percentage of alcohol by volume, and 
the name and quantity of each ingredient used in the manufacture of the 
flavor.
    (c) Each time distilled spirits containing eligible wine or eligible 
flavors are imported into the United States, the importer shall prepare 
a certificate of effective tax rate computation showing the following:
    (1) Name, address, and permit number of the importer;
    (2) Kind (class and type) of product;
    (3) Elements necessary to compute the effective tax rate in 
accordance with Sec. 251.40a as follows--
    (i) Proof gallons of distilled spirits (exclusive of distilled 
spirits derived from eligible flavors);
    (ii) Wine gallons of each eligible wine and the percentage of 
alcohol by volume of each; and
    (iii) Proof gallons of distilled spirits derived from eligible 
flavors;
    (4) After December 1, 1990, the date of the statement of eligibility 
of each eligible wine and of each eligible flavor;
    (5) Effective tax rate applied to the product; and
    (6) Signature of the importer or other duly authorized person under 
the following declaration:

I declare under the penalties of perjury that this certificate of 
effective tax rate computation has been examined by me and, to the best 
of my knowledge and belief, is true, correct, and complete.

    (d) The importer shall file the certificate of effective tax rate 
computation with the district director of customs at the port of entry, 
at the time of entry summary, or, for distilled spirits to be withdrawn 
from customs custody under the provisions of subpart L of this part, 
furnish a copy to the proprietor of the distilled spirits plant to which 
the distilled spirits are transferred.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18070, Apr. 30, 1990]



Sec. 251.77  Standard effective tax rate.

    (a) In lieu of preparing a certificate of effective tax rate 
computation each time distilled spirits containing eligible wine or 
eligible flavors are imported as prescribed in Sec. 251.76(c), an 
importer may have a standard effective tax rate established based on the 
least quantity and the lowest alcohol content of eligible wine or 
eligible flavors used in the manufacture of the product.
    (b) To have a standard effective tax rate established, the importer 
shall cause to be submitted to the ATF National Laboratory, 1401 
Research Boulevard, Rockville, MD 20850, the following:
    (1) The samples prescribed in Sec. 251.76(b)(1) and an 8-ounce 
sample of the finished product;
    (2) The statement of composition prescribed in Sec. 251.76(b)(2);
    (3) A statement of composition for the finished product listing 
the--
    (i) Name of the product;
    (ii) Quantity, alcohol content (percentage of alcohol by volume), 
and the kind (class and type) of each eligible wine or the name of each 
eligible flavor used in the manufacture of the product; and
    (iii) Standard effective tax rate for the product computed in 
accordance with Sec. 251.40a.
    (c) Where a standard effective tax rate has been previously approved 
for a product, an importer, in lieu of having a standard effective tax 
rate established, may use that rate. An importer desiring to use a 
previously approved standard effective tax rate shall obtain a copy of 
the approval from the person to whom it was issued and, over the 
signature of the importer or other duly authorized person, place the 
following declaration:

I declare under the penalties of perjury that this approval has been 
examined by me and, to best of my knowledge and belief, the standard 
effective tax rate established for this product is applicable to all 
like products contained in this shipment.

    (d) A standard effective tax rate may not be employed until approved 
by the ATF National Laboratory. The importer shall file or furnish a 
copy of the standard effective tax rate approval in

[[Page 87]]

the manner prescribed in Sec. 251.76(d). The use of a standard effective 
tax rate shall not relieve an importer from the payment of any tax found 
to be due. The Director may at any time require an importer to 
immediately discontinue the use of a standard effective tax rate.

(Approved by the Office of Management and Budget under control Number 
1512-0352)

[T.D. ATF-297, 55 FR 18070, Apr. 30, 1990; 55 FR 23635, June 11, 1990]

Subparts F-G [Reserved]



           Subpart H--Importation of Distilled Spirits In Bulk



Sec. 251.120  Persons authorized to receive distilled spirits imported in bulk.

    Distilled spirits imported in bulk (i.e., in containers having a 
capacity in excess of 1 gallon (3.785 liters)) may be entered into a 
class 8 customs bonded warehouse for bottling, or may be withdrawn from 
customs custody only if entered for exportation or if withdrawn by a 
person to whom it is lawful to sell or otherwise dispose of distilled 
spirits in bulk pursuant to the Federal Alcohol Administration Act (49 
Stat. 985, as amended; 27 U.S.C., 206) and Regulation 3 (27 CFR part 3). 
The importation and disposition of distilled spirits imported in bulk 
shall be reported as prescribed by Secs. 251.133 to 251.134.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, 1361, 1374, 1395 (26 U.S.C. 
5114, 5207, 5301, 5555))

[T.D. ATF-34, 41 FR 46864, Oct. 26, 1976]



Sec. 251.121  Containers.

    Imported distilled spirits may be bottled in either domestic or 
imported containers conforming to the provisions of subpart N of this 
part.

(72 Stat. 1374; 26 U.S.C. 5301)

[T.D. 6954, 33 FR 6819, May 4, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



                Subpart I--Importer's Records and Reports



Secs. 251.130-251.132  [Reserved]

                  Record and Report of Imported Liquors



Sec. 251.133  General requirements.

    Except as provided in Sec. 251.134, every importer who imports 
distilled spirits, wines, or beer shall keep such records and render 
such reports of the physical receipt and disposition of such liquors as 
are required to be kept by a wholesale or retail dealer, as applicable, 
under the provision of part 194 of this chapter. Any importer who does 
not take physical possession of the liquors at the time of, but is 
responsible for, their release from customs custody shall keep 
commercial records reflecting such release; such records shall identify 
the kind and quantity of the liquors released, the name and address of 
the person receiving the liquors from customs custody, and the date of 
release, and shall be filed chronologically by release dates. Records 
and reports will not be required under this part with respect of liquors 
while in customs custody.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(72 Stat. 1342, 1345, 1395; 26 U.S.C. 5114, 5124, 5555)

[T.D. ATF-2, 37 FR 22743, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984]



Sec. 251.134  Proprietors of qualified premises.

    Importing operations conducted by proprietors of premises qualified 
under the provisions of this chapter shall be recorded and reported in 
accordance with the regulations governing the operations of each such 
premises.

(72 Stat. 1342, 1361, 1395; 26 U.S.C. 5114, 5207, 5555)

[T.D. 6388, 24 FR 4824, June 12, 1959, as amended by T.D. 6477, 25 FR 
6207, July 1, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975]

[[Page 88]]

               Filing and Retention of Records and Reports



Sec. 251.136  Filing.

    (a) All records and reports required by this part will be maintained 
separately, by transaction or reporting date, at the importer's place of 
business. The regional director (compliance) may, pursuant to an 
application, authorize files, or an individual file, to be maintained at 
another business location under the control of the importer, if the 
alternative location does not cause undue inconvenience to ATF or 
Customs officers desiring to examine the files or delay in the timely 
submission of documents.
    (b) If an importer conducts wholesale operations, one legible copy 
of each required record of receipt and disposition shall be filed not 
later than one business day following the date of transaction.
    (c) If an importer conducts only retail operations, they may 
maintain either loose-leaf or book records of the daily receipt of 
liquors which contain all the required information.
    (d) Supporting documents, such as consignors' invoices, delivery 
receipts, bills of lading, etc., or exact copies of the same, may be 
filed in accordance with the importer's regular accounting and 
recordkeeping practices.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended 
(26 U.S.C. 5114, 5555))

[T.D. ATF-116, 47 FR 51573, Nov. 16, 1982, as amended by T.D. ATF-172, 
49 FR 14943, Apr. 16, 1984]



Sec. 251.137  Retention.

    All records required by this part, documents or copies of documents 
supporting these records, and file copies of reports required by this 
part to be submitted to the regional director (compliance) or to the 
district director of customs, shall be retained for not less than three 
years, and during this period shall be available, during business hours, 
for inspection and copying by ATF or customs officers. Furthermore, the 
regional director (compliance) may require these records to be kept for 
an additional period of not more than three years in any case where he 
determines retention necessary or advisable. Any records, or copies 
thereof, containing any of the information required by this part to be 
prepared, wherever kept, shall also be made available for inspection and 
copying.

[T.D. ATF-50, 43 FR 20495, May 12, 1978]

                              Other Records



Sec. 251.138  Transfer record.

    The transfer record for imported spirits prescribed in Sec. 251.172 
shall show the:
    (a) Date prepared;
    (b) Serial number of the transfer record, beginning with ``1'' each 
January 1;
    (c) Name and distilled spirits plant number of the proprietor who 
received the spirits from customs custody;
    (d) Country of origin;
    (e) Name of foreign producer;
    (f) Kind of spirits;
    (g) Age, in years, months and days of the spirits;
    (h) Proof of the spirits;
    (i) Type and number of containers; and
    (j) Proof gallons of spirits in the shipment.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8558, Mar. 1, 1985]



Sec. 251.139  Package gauge record.

    When required in this part, a package gauge record shall be prepared 
to show:
    (a) The date prepared;
    (b) The related transaction record and its serial number; and
    (c) For each package:
    (1) Package identification or serial number;
    (2) Kind of spirits;
    (3) Gross weight;
    (4) Proof;
    (5) Proof gallons;
    (6) Name of warehouseman who received the spirits from customs 
custody; and
    (7) Name of importer.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8558, Mar. 1, 1985]

[[Page 89]]

Subparts J-K [Reserved]



Subpart L--Transfer of Distilled Spirits From Customs Custody to Bonded 
                   Premises of Distilled Spirits Plant



Sec. 251.171  General provisions.

    Imported distilled spirits in bulk containers may, under the 
provisions of this subpart, be withdrawn by the proprietor of a 
distilled spirits plant from customs custody and transferred in such 
bulk containers or by pipeline to the bonded premises of his plant, 
without payment of the internal revenue tax imposed on imported spirits 
by 26 U.S.C. 5001. Imported spirits so withdrawn and transferred to a 
distilled spirits plant (a) may be redistilled or denatured only if of 
185 degrees or more of proof, and (b) may be withdrawn from internal 
revenue bond for any purpose authorized by 26 U.S.C. chapter 51, in the 
same manner as domestic distilled spirits. Imported distilled spirits 
transferred from customs custody to the bonded premises of a distilled 
spirits plant under the provisions of this subpart shall be received and 
stored thereat, and withdrawn or transferred therefrom, subject to the 
applicable provisions of 27 CFR part 19. However, distilled spirits 
plant proprietors are not required to file application on ATF Form 
5100.16 to receive imported spirits from customs custody. The person 
operating the bonded premises of the distilled spirits plant to which 
imported spirits are transferred shall become liable for the tax on 
distilled spirits withdrawn from customs custody under 26 U.S.C. 5232, 
upon release of the spirits from customs custody, and the importer shall 
thereupon be relieved of his liability for such tax.

(Sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended (26 U.S.C. 5232))

[T.D. ATF-62, 44 FR 71719, Dec. 11, 1979, as amended by T.D. ATF-198, 50 
FR 8558, Mar. 1, 1985]



Sec. 251.172  Preparation of transfer record and package gauge record.

    The person importing spirits under this subpart shall prepare a 
transfer record according to Sec. 251.138. A separate transfer record 
shall be prepared for each conveyance. If the spirits are in packages he 
shall prepare a package gauge record according to Sec. 251.139 and 
attach it to the transfer record. The transfer record and the package 
gauge record shall be prepared in triplicate, and, upon release of the 
spirits from customs custody one copy will be given to the customs 
officer, one copy will be forwarded to the regional director 
(compliance) of the region in which the consignee is located, and the 
original will be forwarded to the consignee.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8558, Mar. 1, 1985]



Sec. 251.173  Inspection and release.

    The customs officer shall not release distilled spirits under this 
subpart until he inspects the spirits. If it appears that losses in 
transit were sustained from any container, the customs officer shall 
gauge the spirits in such container and enter the elements of gauge on 
the transfer record if the spirits are in a bulk conveyance or on the 
package gauge record if the spirits are in packages. The customs officer 
shall enter on the transfer record the port of entry, carrier 
identification, warehouse entry number, applicable rate of duty, and 
serial number of any customs seals affixed to bulk conveyances. When all 
customs requirements are complied with, he shall release the spirits for 
transfer to the distilled spirits plant by dating and signing on the 
transfer with his title the statement: ``To the best of my knowledge the 
information hereon is accurate and the spirits are released.'' The 
original of the transfer record with any attachments shall be retained 
by the consignee.

(Sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended (26 U.S.C. 5232))

[T.D. ATF-198, 50 FR 8558, Mar. 1, 1985]



Sec. 251.174  Tank cars and tank trucks to be sealed.

    Where a shipment of distilled spirits from customs custody to the 
distilled spirits plant is made in a tank car or tank truck, all 
openings affording access to the spirits shall be sealed by the customs 
officer with customs seals

[[Page 90]]

in such manner as will prevent unauthorized removal of spirits through 
such openings without detection.

(72 Stat. 1314, 1322, 1366; 26 U.S.C. 5001, 5007, 5232)

[T.D. 6477, 25 FR 6208, July 1, 1960. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 251.175  Receipt by consignee.

    Proprietors of distilled spirits plants who receive imported spirits 
under this subpart shall follow the requirements in 27 CFR part 19 for 
spirits received by transfer in bond. However, proprietors are not 
required to file application on ATF Form 5100.16 to receive imported 
spirits from customs custody.

[T.D. ATF-198, 50 FR 8558, Mar. 1, 1985]



Subpart M--Withdrawal of Imported Distilled Spirits From Customs Custody 
                Free of Tax for Use of the United States

    Source: 50 FR 9200, Mar. 6, 1985, unless otherwise noted.



Sec. 251.181  General.

    (a) The United States or any of its Government agencies may, upon 
filing proper customs entry, withdraw imported distilled spirits free of 
tax from customs custody, as authorized by 26 U.S.C. 5313 and under the 
provisions of this subpart. Before any distilled spirits may be 
withdrawn, a permit to procure the spirits shall be obtained from the 
Director. A bond is not required for any Government agency to procure 
and withdraw spirits free of tax under this subpart.
    (b) The provisions of subpart N of part 22 of this chapter cover the 
withdrawal of domestically produced tax-free spirits for use of the 
United States or any of its Government agencies.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1372, as amended, 1375, as amended 
(26 U.S.C. 5273, 5313))



Sec. 251.182  Application and permit, Form 5150.33.

    (a) General. All permits previously issued to the United States or 
any of its Government agencies on Form 1444 shall remain valid and will 
be regulated by the same provisions of this subpart as it refers to 
permits on Form 5150.33.
    (b) Application. (1) A Government agency of the United States shall 
apply to the Director for a permit to procure and withdraw spirits free 
of tax on Form 5150.33. Upon approval by the Director, Form 5150.33 will 
be returned to the agency.
    (2) If a Government agency intends to withdraw spirits free of tax 
under this part and part 22 of this chapter, Form 5150.33 may be 
annotated to cover both types of withdrawals.
    (3) A separate permit is not required for each port of entry. The 
application, Form 5150.33, may be completed to indicate the applicable 
ports of entry in which spirits will be withdrawn from customs custody.
    (4) A Government agency may specify on its application that it 
desires a single permit authorizing all sub-agencies under its control 
to procure and withdraw spirits free of tax under this subpart and 
subpart N of part 22 of this chapter; or, each Government location may 
individually file an application for a permit, Form 5150.33.
    (5) Each application for a permit shall be signed by the head of the 
agency or sub-agency, or the incumbent of an office which is authorized 
by the head of the agency or sub-agency, to sign. Evidence of 
authorization to sign on behalf of the head of an agency or sub-agency 
shall be furnished with the application.
    (c) Use of spirits. Spirits withdrawn under this subpart may not be 
used for non-Government purposes.
    (d) Cancellation of permit. All permits on Form 5150.33 and previous 
editions on Form 1444 shall remain in force until surrendered or 
canceled. Upon surrender or cancellation, the Government agency shall 
obtain and destroy all photocopies of the permit furnished to district 
directors of customs, and forward the original to the Director for 
cancellation.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5313))



Sec. 251.183  Use of permit, Form 5150.33.

    Each Government agency shall retain the original of its permit, Form 
5150.33, on file. When filing an initial customs entry to withdraw 
spirits free of tax

[[Page 91]]

from a port of entry, the agency shall furnish a photocopy of its permit 
to the district director of customs for retention. In the case of an 
agency holding a single permit for use of its sub-agencies, an 
attachment to the permit shall list all locations authorized to withdraw 
spirits free of tax from customs custody. Any subsequent requests for 
customs entry from the same port shall refer to the permit number.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5313))



Sec. 251.184  Entry documents.

    Entry documents for importation of tax-free spirits under this 
subpart shall record the serial numbers or other identifying numbers of 
the containers and the total quantity in proof gallons of the spirits to 
be entered.

[T.D. ATF-198, 50 FR 8559, Mar. 1, 1985]



Sec. 251.185  Customs release.

    (a) Upon receipt of appropriate customs entry and a photocopy of a 
permit, Form 5150.33 or previous editions on Form 1444 (5150.33), the 
district director of customs shall, following an inspection of the 
shipment, release spirits free of tax to the Government agency named on 
the permit, or an attachment thereto.
    (b) Customs officers shall not release spirits for shipment until 
the shipment has been inspected for losses in transit. If it appears 
that a container or containers have sustained losses in transit, the 
customs officers shall gauge the damaged container and prepare a package 
gauge record for the entire shipment, according to Sec. 251.139. A copy 
of the package gauge record will be retained for the customs files and 
the original forwarded to the consignee agency.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5313))



               Subpart N--Requirements for Liquor Bottles

    Authority: Sec. 5301, 72 Stat. 1374; 26 U.S.C. 5301.

    Source: T.D. 6954, 33 FR 6819, May 4, 1968, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 251.201  Scope of subpart.

    The provisions of this subpart shall apply only to liquor bottles 
having a capacity of 200 ml. or more except where expressly applied to 
liquor bottles of less than 200 ml. capacity.

[T.D. 6954, 33 FR 6819, May 4, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-34, 41 FR 46865, Oct. 26, 1976]



Sec. 251.202  Standards of fill.

    Distilled spirits imported into the United States in containers of 1 
gallon (3.785 liters) or less for sale shall be imported only in liquor 
bottles, including liquor bottles of less than 200 ml capacity, which 
conform to the applicable standards of fill provided in Sec. 5.47a of 
this chapter. Empty liquor bottles, including liquor bottles of less 
than 200 ml capacity, which conform to the provisions of part 19, or 
subpart E of part 5 of this chapter, may be imported for packaging 
distilled spirits in the United States as provided in part 19 of this 
chapter.

[T.D. ATF-62, 44 FR 71720, Dec. 11, 1979]



Sec. 251.204  Distinctive liquor bottles.

    (a) Application. Liquor bottles of distinctive shape or design, 
including bottles of less than 200 ml. capacity, may be imported by an 
importer (filled bottles) or a bottler (empty bottles). For filled 
bottles, the importer shall submit ATF Form 5100.31 to the Director for 
approval prior to importation of such bottles into the United States. 
For empty bottles, the bottler shall obtain approval from the Director 
on ATF Form 5100.31 prior to using the bottles. The importer or bottler, 
as applicable, shall certify as to the total capacity of a 
representative sample bottle before closure (expressed in milliliters) 
on each copy of the form. In addition, the applicant shall affix a 
readily legible photograph (both front and back of the bottle to the 
front of each copy of ATF Form 5100.31, along with the label(s) to be 
used on the bottle. The applicant shall not submit an actual bottle or 
an authentic model unless specifically requested to do so.

[[Page 92]]

    (b) Approval. Properly submitted ATF Forms 5100.31 to import 
distinctive liquor bottles (filled), or, properly submitted ATF Forms 
5100.31 to use distinctive liquor bottles (empty) which have been 
imported, shall be approved provided such bottles are found by the 
Director to--
    (1) Meet the requirements of 27 CFR part 5;
    (2) Be distinctive;
    (3) Be suitable for their intended purpose;
    (4) Not jeopardize the revenue; and
    (5) Not be deceptive to the consumer.

The applicant shall keep a copy of the approved ATF Form 5100.31, 
including an approved photograph (both front and back) of the 
distinctive liquor bottle, on file at his premises. If ATF Form 5100.31 
is disapproved, the applicant shall be notified of the Director's 
decision and the reasons therefor. The applicant importer is responsible 
for furnishing a copy of the approved ATF Form 5100.31, including a 
photograph of the distinctive liquor bottle, to Customs officials at 
each affected port of entry where the merchandise is examined.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-114, 47 FR 43951, Oct. 5, 1982, as amended by T.D. ATF-242, 51 
FR 39526, Oct. 29, 1986]



Sec. 251.205  [Reserved]



Sec. 251.206  Bottles not constituting approved containers.

    The Director is authorized to disapprove any bottle, including a 
bottle of less than 200 ml. capacity, for use as a liquor bottle which 
he determines to be deceptive. The Customs officer at the port of entry 
shall deny entry of any such bottle containing distilled spirits upon 
advice from the Director that such bottle is not an approved container 
for distilled spirits for consumption in the United States.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-114, 47 FR 43951, Oct. 5, 1982]



Sec. 251.207  Bottles to be used for display purposes.

    Empty liquor bottles may be imported and furnished to liquor dealers 
for display purposes, provided each bottle is marked to show that it is 
to be used for such purpose. The importer shall keep records of the 
receipt and disposition of such bottles, showing the names and addresses 
of consignees, dates of shipment, and size, quantity, and description of 
bottles.

[T.D. ATF-206, 50 FR 23956, June 7, 1985]



Sec. 251.208  Liquor bottles denied entry.

    Filled liquor bottles, not conforming to the provisions of this 
subpart, shall be denied entry into the United States: Provided, That, 
upon letterhead application, in triplicate, the regional director 
(compliance) of the region in which the port of entry is situated may, 
in nonrecurring cases, authorize the release from customs custody of 
distilled spirits in bottles, except those coming under the provisions 
of Sec. 251.206, which, through unintentional error, do not conform to 
the provisions of this subpart, if he finds that such release will not 
afford a jeopardy to the revenue.

(Approved by the Office of Management and Budget under control number 
1512-0352)

[T.D. 6954, 33 FR 6819, May 4, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984]



Sec. 251.209  Used liquor bottles.

    The Director may pursuant to letterhead application filed in 
triplicate, authorize an importer to receive liquor bottles assembled 
for him as provided in Sec. 194.263 of this chapter. Used liquor bottles 
so received may be stored at any suitable location pending exportation 
for reuse. The importer shall keep records of the receipt and 
disposition of used liquor bottles.

(Approved by the Office of Management and Budget under control number 
1512-0352]

[T.D. 6954, 33 FR 6819, May 4, 1968, as amended by T.D. 7006, 34 FR 
2251, Feb. 15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and 
amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984]

[[Page 93]]



                   Subpart O--Miscellaneous Provisions



Sec. 251.221  Alternate methods or procedures.

    (a) Application. An importer who desires to use an alternate method 
or procedure in lieu of a method or procedure prescribed by this part 
shall file application, in triplicate, with the regional director 
(compliance) of the region in which his place of business is located. If 
the importer has several places of business at which he desires to use 
such alternate method or procedure, a separate application shall be 
submitted for each. Each application shall:
    (1) Specify the name, address, and permit number of the importer to 
which it relates;
    (2) State the purpose for which filed; and
    (3) Specifically describe the alternate method or procedure and set 
forth the reasons therefor.

No alternate method or procedure relating to the assessment, payment, or 
collection of tax shall be authorized under this paragraph.
    (b) Approval. When an application for use of an alternate method or 
procedure is received, the regional director (compliance) shall 
determine whether approval thereof would unduly hinder the effective 
administration of this part or would result in jeopardy to the revenue. 
The regional director (compliance) shall forward two copies of the 
application to the Director, together with a report of his findings and 
his recommendation. The Director may approve the alternate method or 
procedure if he finds that:
    (1) Good cause has been shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue; and
    (3) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part.

No alternate method or procedure shall be used until approval has been 
received from the Director. Authorization for the alternate method or 
procedure may be withdrawn whenever in the judgment of the Director, the 
revenue is jeopardized or the effective administration of this part is 
hindered by the continuation of such authorization.

(Approved by the Office of Management and Budget under control number 
1512-0352)

[T.D. ATF-2, 37 FR 22743, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984]



PART 252--EXPORTATION OF LIQUORS--Table of Contents




                            Subpart A--Scope

Sec.
252.1  General.
252.2  Forms prescribed.
252.3  Related regulations.

                         Subpart B--Definitions

252.11  Meaning of terms.

                   Subpart C--Miscellaneous Provisions

      Withdrawal or Lading for Use on Certain Vessels and Aircraft

252.20  Alternate methods or procedures; and emergency variations from 
          requirements.
252.21  General.
252.22  Vessels employed in the fisheries.
252.23  Reciprocating foreign countries.

                     Manufacturing Bonded Warehouses

252.25  General.

                        Customs Bonded Warehouses

252.26  Entry of distilled spirits into customs bonded warehouses.
252.27  Entry of wine into customs bonded warehouses.
252.28  Withdrawal of wine and distilled spirits from customs bonded 
          warehouses.

                           Foreign-Trade Zones

252.30  Export status.

 Voluntary Destruction of Liquors After Receipt in a Foreign-Trade Zone

252.35  General.
252.36  Application.
252.37  Action by regional director (compliance).
252.38  Action by district director of customs.

[[Page 94]]

                     Evidence of Exportation and Use

252.40  Evidence of exportation: distilled spirits and wine.
252.41  Evidence of lading for use on vessles or aircraft: distilled 
          spirits and wine.
252.42  Evidence of deposit.
252.43  Evidence of exportation and lading for use on vessels and 
          aircraft: beer.

                          Retention of Records

252.45  Retention of records.

                          Penalties of Perjury

252.48  Execution under penalties of perjury.

                 Subpart D--Bands and Consents of Surety

252.51  General.
252.52  Corporate surety.
252.52a  Filing of powers of attorney.
252.52b  Execution of powers of attorney.
252.53  Deposit of securities in lieu of corporate surety.
252.54  Consents of surety.
252.55  Authority to approve bonds and consents of surety.
252.56  Disapproval of bonds or consents of surety.
252.57  Appeal to Director.
252.58  Operations or unit bond--distilled spirits.
252.59  Bond, Form 700.
252.60  Brewer's bond, Form 5130.22.
252.61  Bond, Form 2734 (5100.25).
252.62  Bond, Form 2735 (5100.30).
252.63  Bond, Form 2736.
252.64  Bond, Form 2737.
252.65  Bond, Form 2738.
252.66  Strengthening bonds.
252.67  New or superseding bonds.

                          Termination of Bonds

252.70  Termination of bonds, Forms 2734 and 2736.
252.71  Termination of bonds, Forms 2735, 2737, and 2738.
252.72  Application of surety for relief from bond.
252.73  Relief of surety from bond.
252.74  Release of pledged securities.

                           Charges and Credits

252.80  Charges and credits on bonds.

 Subpart E--Withdrawal of Distilled Spirits Without Payment of Tax for 
 Exportation, Use on Vessels and Aircraft, Transfer to a Foreign-Trade 
       Zone, or Transportation to a Manufacturing Bonded Warehouse

252.91  General.
252.92  Application or notice, ATF Form 5100.11.
252.93  Carrier to be designated.
252.94  Containers.
252.95  Change of packages for exportation.
252.96  Approval of application.
252.97  [Reserved]
252.98  Inspection and regauge.
252.100  [Reserved]
252.101  Packages to be stamped.
252.102  Bottles to have closures affixed.
252.103  Export marks.
252.104  Certificates of origin.
252.105  Report of inspection and tax liability.
252.106  Consignment, shipment, and delivery.
252.107  Disposition of forms.

                                 Losses

252.110  Losses.

                  Return of Spirits to Bonded Premises

252.115  General.
252.116  Notice of return of spirits withdrawn without payment of tax.
252.117  Responsibility for return of spirits.
252.118  Receipt of spirits.

 Subpart F--Withdrawal of Wine Without Payment of Tax for Exportation, 
 Use on Vessels and Aircraft, Transfer to a Foreign-Trade Zone or to a 
 Customs Bonded Warehouse, or Transportation to a Manufacturing Bonded 
                                Warehouse

252.121  General.
252.122  Application or notice, ATF Form 5100.11.
252.123  Export marks.
252.124  Consignment, shipment, and delivery.
252.125  Disposition of forms.
252.126  Proprietor's report.
252.127  Losses.

                  Return of Wines to Bonded Wine Cellar

252.130  General.
252.131  Application for return of wines withdrawn without payment of 
          tax.
252.132  Responsibility for return of wine.
252.133  Disposition of forms.

 Subpart G--Removal of Beer and Beer Concentrate Without Payment of Tax 
for Exportation, Use as Supplies on Vessels and Aircraft, or Transfer to 
                          a Foreign-Trade Zone

252.141  General.
252.142  Notice, Form 1689.
252.143  Containers.
252.144  Export marks.
252.145  Consignment, shipment and delivery.
252.146  Disposition of forms.
252.147  Return of beer or beer concentrate.
252.148  Brewer's report.
252.149  Losses.

[[Page 95]]

252.150  Charges and credits on bond.

 Subpart H--Withdrawal of Specially Denatured Spirits, Free of Tax, for 
             Exportation or Transfer to a Foreign-Trade Zone

252.151  General.
252.152  Notice, ATF Form 5100.11.
252.153  Withdrawal procedure.
252.154  Export marks.
252.155  Consignment, shipment, and delivery.
252.156  Losses.

        Return of Specially Denatured Spirits to Bonded Premises

252.160  General.
252.161  Notice of return of specially denatured spirits.
252.162  Responsibility for return of specially denatured spirits.
252.163  Receipt of specially denatured spirits.

  Subpart I--Exportation of Distilled Spirits With Benefit of Drawback

252.171  General.

                      Filing of Notice and Removal

252.190  Notice, ATF Form 5110.30.
252.191  [Reserved]
252.192  Packages of distilled spirits to be gauged.
252.193  Export marks.
252.194-252.195  [Reserved]
252.195a  Claims on spirits tax determined before January 1, 1980.
252.195b  Claims on spirits tax determined on and after January 1, 1980.
252.196  Consignment, shipment, and delivery.
252.197  Return of spirits withdrawn for export with benefit of 
          drawback.
252.198  Notice of return.
252.199  Responsibility for return of spirits withdrawn for export with 
          benefit of drawback.

Subpart J [Reserved]

         Subpart K--Exportation of Wine With Benefit of Drawback

252.211  General.
252.212  Persons authorized.
252.213  [Reserved]
252.214  Notice and claim, Form 1582-A.
252.215  Certificate of tax determination, Form 2605.
252.216  Export marks.
252.217  Consignment, shipment, and delivery.
252.218  Disposition of Forms 1582-A.
252.219  Return of wine withdrawn for export with benefit of drawback.
252.220  Notice of return.
252.220a  Responsibility for return of wine withdrawn for export with 
          benefit of drawback.

         Subpart L--Exportation of Beer With Benefit of Drawback

252.221  General.
252.222  Claim, Form 1582-B.
252.223  Export marks.

                           Execution of Claims

252.225  Removals of beer by brewer.
252.226  Removals of beer by agent on behalf of brewer.
252.227  Removals of beer by persons other than the brewer or agent of 
          the brewer.

                   Consignment, Shipment, and Delivery

252.230  Consignment, shipment, and delivery.

               Subpart M--Shipment or Delivery for Export

                               Consignment

252.241  Shipment for export, or for use on vessels.
252.242  Shipment for use on aircraft.
252.243  Shipment to armed services.
252.244  Shipment to manufacturing bonded warehouse.
252.244a  Shipment to a customs bonded warehouse.
252.245  Shipment to foreign-trade zone.
252.246  Delivery for shipment.
252.247  Change in consignee.

                             Bills of Lading

252.250  Bills of lading required.
252.251  Railway express receipts.
252.252  Air express or freight bills of lading.
252.253  Certificate by export carrier.

                Subpart N--Proceedings at Ports of Export

252.261  Notice to district director of customs.
252.262  Delay in lading at port.
252.263  [Reserved]
252.264  Lading for exportation.
252.265  Evidence of fraud.
252.266  Release of detained merchandise.
252.267  Exportation from interior port.
252.268  Receipt for liquors for use on vessels or aircraft.
252.269  Certification by district director of customs.

                        Receipt by Armed Services

252.275  Receipt by armed services.

                       Lading for Use on Aircraft

252.280  Distilled spirits and wines.
252.281  Certificate of use for distilled spirits and wines.
252.282  Beer.

[[Page 96]]

                Receipt in Manufacturing Bonded Warehouse

252.285  Receipt in manufacturing bonded warehouse.

                   Receipt in Customs Bonded Warehouse

252.286  Receipt in customs bonded warehouse.

                      Receipt in Foreign-Trade Zone

252.290  Receipt in foreign-trade zone.

                              Customs Gauge

252.291  Customs Form 6001.

                          Alternate Procedures

252.295  Exception for export of beer.

                            Subpart O--Losses

                            Distilled Spirits

252.301  Loss of distilled spirits in transit.
252.302  Notice to exporter.
252.303  Filing of claims.
252.304  Action on claim.

                       Specially Denatured Spirits

252.310  Loss of specially denatured spirits in transit.

                                  Wine

252.315  Loss of wine in transit.
252.316  Notice to exporter.
252.317  Filing of claims.
252.318  Action on claim.

                        Beer and Beer Concentrate

252.320  Loss of beer and beer concentrate in transit.
252.321  Tax assessed on loss not accounted for.

                       Subpart P--Action on Claims

252.331  Claims supported by bond, Form 2738.
252.332  Claim against bond.
252.333  Where no bond is filed.
252.334  Credit allowance.
252.335  Disallowance of claim.

    Authority: 5 U.S.C. 552(a); 19 U.S.C. 81c, 1202; 26 U.S.C. 5001, 
5007, 5008, 5041, 5051, 5054, 5061, 5111, 5112, 5114, 5121, 5122, 5124, 
5201, 5205, 5207, 5232, 5273, 5301, 5313, 5555, 6302, 7805; 27 U.S.C. 
203, 205; 44 U.S.C. 3504(h).

    Source: 25 FR 5734, June 23, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



                            Subpart A--Scope



Sec. 252.1  General.

    The regulations in this part relate to exportation, lading for use 
on vessels and aircraft, and the transfer to a foreign-trade zone or a 
manufacturing bonded warehouse, class 6, of distilled spirits (including 
specially denatured spirits), beer, and wine, and in the case of 
distilled spirits and wine only, transfer to a customs bonded warehouse 
as provided for in 26 U.S.C. 5066 and 5362, whether without payment of 
tax, free of tax, or with benefit of drawback, and includes requirements 
with respect to removal, shipment, lading, deposit, evidence of 
exportation, losses, claims, and bonds.

[T.D. ATF-88, 46 FR 39814, Aug. 5, 1981]



Sec. 252.2  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46921, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5963, Feb. 27, 1987; T.D. ATF-372, 61 FR 20725, May 8, 1996]



Sec. 252.3  Related regulations.

    Regulations relating to this part are listed below:

19 CFR Chapter I--Customs Regulations
27 CFR Part 1--Basic Permit Requirements Under the Federal Alcohol 
Administration Act
27 CFR Part 4--Labeling and Advertising of Wine
27 CFR Part 19--Distilled Spirits Plants
27 CFR Part 21--Formulas for Denatured Alcohol and Rum
27 CFR Part 24--Wine
27 CFR Part 25--Beer
27 CFR Part 30--Gauging Manual
27 CFR Part 194--Liquor Dealers

[[Page 97]]

31 CFR Part 225--Acceptance of Bonds, Notes, or Other Obligations Issued 
or Guaranteed by the United States as Security in Lieu of Surety of 
Sureties on Penal Bonds

[T.D. ATF-224, 51 FR 7698, Mar. 5, 1986; as amended by T.D. ATF-299, 55 
FR 25033, June 19, 1990]



                         Subpart B--Definitions



Sec. 252.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
section. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not enumerated which are in the same general class.
    ATF Officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this part.
    Beer. Beer, ale, porter, stout, and other similar fermented 
beverages (including sake or similar products) of any name or 
description containing one-half of 1 percent or more of alcohol by 
volume, brewed or produced from malt, wholly or in part, or from any 
substitute therefor.
    Bonded premises--distilled spirits plant. The premises of a 
distilled spirits plant, or part thereof, on which distilled spirits 
operations defined in 26 U.S.C. 5002 are authorized to be conducted.
    Bonded wine cellar. Premises established under part 240 of this 
chapter for the production, blending, cellar treatment, storage, 
bottling, packaging, or repackaging of untaxpaid wine.
    Brewer. A proprietor of a brewery.
    Brewery. Premises established under part 25 of this chapter for the 
production of beer.
    Bulk container. any container having a capacity of more than 1 
gallon.
    CFR. The Code of Federal Regulations.
    Container. Any receptacle, vessel, or any form of package, bottle, 
can, tank, or pipeline used, or capable of being used, for holding, 
storing, transferring, or conveying liquors.
    Customs bonded warehouse. A customs bonded warehouse, class 2, 3, or 
8, established under the provisions of Customs Regulations (19 CFR 
chapter I).
    Customs officer. Any officer of the Customs Service or any 
commissioned, warrant, or petty officer of the Coast Guard, or any agent 
or other person authorized by law or designated by the Secretary of the 
Treasury to perform the duties of an officer of the Customs Service.
    Delegate. Any officer, employee, or agency of the Department of the 
Treasury authorized by the Secretary of the Treasury directly, or 
indirectly by one or more redelegations of authority, to perform the 
function mentioned or described in the context.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, 
Department of the Treasury, Washington, DC.
    District district director of customs. The district district 
director of customs at a headquarters port of the district (except the 
district of New York, NY), the area directors of customs in the district 
of New York, NY, and the port director at a port not designated as a 
headquarters port.
    Distilled spirits or spirits. That substance known as ethyl alcohol, 
ethanol, or spirits of wine, in any form (including all dilutions and 
mixtures thereof, from whatever source or by whatever process produced) 
but not denatured spirits.
    Distilled spirits plant. An establishment qualified under the 
provisions of part 19 of this chapter for the production, warehousing, 
or processing of spirits, or for authorized combinations of such 
operations.
    District director. A district director of internal revenue.
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the return, claim, form, or other document or, where no form 
of declaration is prescribed, with the declaration:

    I declare under the penalties of perjury that this __________ 
(insert type of document such as statement, report, certificate, 
application, claim, or other document), including the documents 
submitted in support thereof,

[[Page 98]]

has been examined by me and, to the best of my knowledge and belief, is 
true, correct, and complete.

    Exportation. A severance of goods from the mass of things belonging 
to the United States with the intention of uniting them to the mass of 
things belonging to some foreign country and shall include shipments to 
any possession of the United States. The export character of any 
shipment shall be determined by the intention with which it is made, and 
it assumes an export character only when destined for use in a foreign 
country or in a possession of the United States. For the purposes of 
this part, shipments to the Commonwealth of Puerto Rico, to the 
territories of the Virgin Islands, American Samoa and Guam, and to the 
Panama Canal Zone shall also be treated as exportations.
    Foreign-trade zone or zone. A foreign-trade zone established and 
operated pursuant to the Act of June 18, 1934, as amended.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.
    Liquor. Distilled spirits, wines, and/or beer.
    Liter. A metric unit of capacity equal to 1,000 cubic centimeters of 
alcoholic beverage, and equivalent to 33.814 fluid ounces. A liter is 
divided into 1,000 milliliters. Milliliter or milliliters may be 
abbreviated as ``ml''.
    Manufacturing bonded warehouse. A manufacturing bonded warehouse, 
class six, established under the provisions of Customs Regulations (19 
CFR, chapter I).
    Package. Any cask, keg, barrel, drum, or similar portable container.
    Person. An individual, a trust, an estate, a partnership, an 
association, a company, or a corporation.
    Proof. The ethyl alcohol content of a liquid at 60 degrees 
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
    Proof gallon. A gallon at 60 degrees Fahrenheit which contains 50 
percent by volume of ethyl alcohol having a specific gravity of 0.7939 
at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as 
unity, or the alcoholic equivalent thereof.
    Proprietor. The person who operates the brewery, distilled spirits 
plant, bonded wine cellar, taxpaid wine bottling house, or manufacturing 
bonded warehouse, as the case may be, referred to in this part.
    Region. A bureau of Alcohol, Tobacco and Firearms Region.
    Regional Director (compliance). The principal ATF regional official 
responsible for administering regulations in this part.
    Secretary. The Secretary of the Treasury or his delegate.
    Specially denatured spirits. Alcohol or rum, as defined in part 21 
of this chapter, denatured pursuant to the formulas authorized in part 
21 for specially denatured alcohol or rum.
    Tank truck. A tank-equipped semi-trailer, trailer, or truck.
    Tax. The distilled spirits tax, the beer tax, or the applicable wine 
tax, as the case may be, imposed by 26 U.S.C. chapter 51.
    U.S.C. The United States Code.
    Wine. All kinds and types of wine having not in excess of 24 percent 
of alcohol by volume.
    Zone operator. The person to which the privilege of establishing, 
operating, and maintaining a foreign-trade zone has been granted by the 
Foreign-Trade Zones Board created by the Act of June 18, 1934, as 
amended.

(68A Stat. 917, as amended (26 U.S.C. 7805); 49 Stat. 981, as amended 
(27 U.S.C. 205))

[T.D. ATF-48, 43 FR 13552, Mar. 31, 1978, as amended by T.D. ATF-51, 43 
FR 24243, June 2, 1978; 44 FR 55854, Sept. 28, 1979; T.D. ATF-62, 44 FR 
71720, Dec. 11, 1979; T.D. ATF-199, 50 FR 9201, Mar. 6, 1985; T.D. ATF-
224, 51 FR 7698, Mar. 5, 1986]



                   Subpart C--Miscellaneous Provisions

      Withdrawal or Lading for Use on Certain Vessels and Aircraft



Sec. 252.20  Alternate methods or procedures; and emergency variations from requirements.

    (a) Alternate methods or procedures--(1) Application. An exporter, 
after receiving approval from the Director, may use an alternate method 
or procedure (including alternate construction or

[[Page 99]]

equipment) in lieu of a method or procedure prescribed by this part. An 
exporter wishing to use an alternate method or procedure may apply to 
the regional director (compliance). The exporter shall describe the 
proposed alternate method or procedure and shall set forth the reasons 
for its use.
    (2) Approval by Director. The Director may approve the use of an 
alternate method or procedure if:
    (i) The applicant shows good cause for its use;
    (ii) It is consistent with the purpose and effect of the procedure 
prescribed by this part, and provides equal security to the revenue;
    (iii) It is not contrary to law; and
    (iv) It will not cause an increase in cost to the Government and 
will not hinder the effective administration of this part.
    (3) Exceptions. The Director will not authorize an alternate method 
or procedure relating to the giving of a bond or the payment of tax.
    (4) Conditions of approval. An exporter may not employ an alternate 
method or procedure until the Director has approved its use. The 
exporter shall, during the terms of the authorization of an alternate 
method or procedure, comply with the terms of the approved application.
    (b) Emergency variations from requirements--(1) Application. When an 
emergency exists, an exporter may apply to the regional director 
(compliance) for a variation from the requirements of this part relating 
to construction, equipment, and methods of operation. The exporter shall 
describe the proposed variation and set forth the reasons for using it.
    (2) Approval by regional director (compliance). The regional 
director (compliance) may approve an emergency variation from 
requirements if:
    (i) An emergency exists;
    (ii) The variation from the requirements is necessary;
    (iii) It will afford the same security and protection to the revenue 
as intended by the specific regulations;
    (iv) It will not hinder the effective administration of this part; 
and
    (v) It is not contrary to law.
    (3) Conditions of approval. An exporter may not employ an emergency 
variation from the requirements until the regional director (compliance) 
has approved its use. Approval of variations from requirements are 
conditioned upon compliance with the conditions and limitations set 
forth in the approval.
    (4) Automatic termination of approval. If the exporter fails to 
comply in good faith with the procedures, conditions or limitations set 
forth in the approval, authority for the variation from requirements is 
automatically terminated and the exporter is required to comply with 
prescribed requirements of regulations from which those variations were 
authorized.
    (c) Withdrawal of approval. The Director may withdraw approval for 
an alternate method or procedure, or the regional director (compliance) 
may withdraw approval for an emergency variation from requirements, 
approved under paragraph (a) or (b) of this section, if the Director or 
the regional director (compliance) finds the revenue is jeopardized or 
the effective administration of this part is hindered by the approval.

(Act of August 16, 1954, Ch. 736, 68A Stat. 917 (26 U.S.C. 7805); sec. 
201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))

[T.D. ATF-199, 50 FR 9201, Mar. 6, 1985]



Sec. 252.21  General.

    Liquors may be withdrawn without payment of tax for lading, and 
liquors on which the tax has been paid or determined may be laden with 
benefit of drawback of tax, subject to this part, for use on vessels and 
aircraft as follows:
    (a) Vessels or aircraft operated by the United States;
    (b) Vessels of the United States employed in the fisheries as 
provided in Sec. 252.22 or in the whaling business, or actually engaged 
in foreign trade or trade between the Atlantic and Pacific ports of the 
United States or between the United States and any of its possessions, 
or between Hawaii and any other part of the United States or between 
Alaska and any other part of the United States;
    (c) Aircraft registered in the United States and actually engaged in 
foreign trade or trade between the United

[[Page 100]]

States and any of its possessions, or between Hawaii and any other part 
of the United States or between Alaska and any other part of the United 
States;
    (d) Vessels of war of any foreign nation;
    (e) Foreign vessels employed in the fisheries as provided in 
Sec. 252.22 or in the whaling business, or actually engaged in foreign 
trade or trade between the United States and any of its possessions, or 
between Hawaii and any other part of the United States or between Alaska 
and any other part of the United States; where such trade by foreign 
vessels is permitted; or
    (f) Aircraft registered in any foreign country and actually engaged 
in foreign trade or trade between the United States and any of its 
possessions, or between Hawaii and any other part of the United States 
or between Alaska and any other part of the United States, where trade 
by foreign aircraft is permitted, and where the Secretary of the 
Treasury shall have been advised by the Secretary of Commerce that he 
has found such foreign country allows, or will allow, substantially 
reciprocal privileges in respect to aircraft registered in the United 
States.

(46 Stat. 690, as amended; 72 Stat. 1334, 1335, 1336, 1362, 1380; 19 
U.S.C. 1309, 26 U.S.C. 5053, 5055, 5062, 5214, 5362)

[T.D. 6588, 27 FR 773, Jan. 26, 1962. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 252.22  Vessels employed in the fisheries.

    Liquors may be withdrawn or laden under the provisions of paragraphs 
(b) and (e) of Sec. 252.21 relating to vessels employed in the 
fisheries, only for use on vessels of the United States documented to 
engage in the fisheries and foreign fishing vessels of 5 net tons or 
over if the district director of customs is satisfied by reason of the 
quantity requested in the light of (a) whether the vessel is employed in 
substantially continuous fishing activities, and (b) the vessel's 
complement, that none of the liquors to be withdrawn or laden are 
intended to be removed from the vessel in, or otherwise returned to, the 
United States. Such withdrawal or lading shall be conditioned upon 
compliance with the applicable provisions of this part. Lading of such 
liquors for use on such vessels shall be subject to approval by the 
district director of customs of a special written application by the 
withdrawer or the vessel's master on customs Form 5125 (in duplicate) 
and a statement by the withdrawer in his application or notice on the 
required ATF Form 5100.11, 5110.30, 1582-A, 1582-B, or 1689, as the case 
may be, that the liquors are to be laden for use as supplies on a vessel 
employed in the fisheries. The original application on customs Form 
5125, after approval, shall be stamped with the serial number of the ATF 
Form 5100.11, 5110.30, 1582-A, 1582-B, or 1689, as the case may be, and 
the date thereof, and shall be returned by the district director of 
customs to the withdrawer or vessel's master for use as prescribed 
below. Approval of each such application shall be subject to the 
condition that the original shall be presented thereafter by the 
withdrawer or the vessel's master to the district director of customs 
within 24 hours (excluding Saturday, Sunday, and holidays) after each 
subsequent arrival of the vessel at a customs port or station and that 
an accounting shall be made at the time of such presentation of the 
disposition of the liquors until the district director of customs is 
satisfied that they have been consumed on board, or landed under customs 
supervision, and takes up the authorization. The approval of customs 
Form 5125 shall be subject to the further condition that any such 
liquors remaining on board while the vessel is in port shall be 
safeguarded in the manner and to such extent as the director of the port 
or place of arrival shall deem necessary. When such liquors have been 
accounted for to the satisfaction of the district director of customs, 
he shall execute his certificate of lading and use on both copies of the 
ATF Form 5100.11, 5110.30, 1582-A, 1582-B, or 1689, as the case may be, 
and forward the original of the form to the regional director 
(compliance) designated thereon. In the event of a failure on the part 
of the withdrawer or the master of the vessel to comply with the 
conditions of this section or upon receipt of evidence that the liquors 
were not lawfully used as supplies on the vessel, the district director 
of customs shall advise the regional director (compliance) of all the

[[Page 101]]

facts in the case for determination of any liability incurred. In the 
case of liquors withdrawn without payment of tax, assessment of tax 
liability found to have been incurred shall be made against the 
principal on the bond. In the case of taxpaid or tax determined liquors, 
the regional director (compliance) shall determine as to whether to make 
demand upon the principal and the surety on the bond or to disallow the 
claim as the case may be.
    Note: As used in this section, the word ``withdrawer'' shall mean 
the person executing the application or notice, ATF Form 5100.11, 
5110.30, 1582-A, 1582-B, or 1689, as the case may be.

(46 Stat. 690, as amended, 72 Stat. 1334, 1335, 1336, 1362, 1380; 19 
U.S.C. 1309, 26 U.S.C. 5053, 5055, 5062, 5214, 5362)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 252.22, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 252.23  Reciprocating foreign countries.

    Assistant regional commissioners may approve applications relating 
to the withdrawal or lading of liquors for use on aircraft of those 
foreign countries which will allow, to aircraft registered in the United 
States and engaged in foreign trade, privileges substantially reciprocal 
to the privileges allowed herein to aircraft of a foreign country. Where 
application is made to withdraw or lade liquors for use on aircraft of 
other countries, which it is claimed reciprocate similar privileges to 
aircraft of the United States, the applicant must first establish the 
right of such withdrawal or lading. In appropriate cases, the applicant 
should request the Secretary of Commerce to find and advise the 
Secretary of the Treasury that such foreign country or countries allow, 
or will allow, substantially reciprocal privileges to aircraft of the 
United States.

(46 Stat. 690, as amended; 19 U.S.C. 1309)

                     Manufacturing Bonded Warehouses



Sec. 252.25  General.

    The proprietor of a duly constituted manufacturing bonded warehouse, 
established in accordance with law and the regulations in 19 CFR chapter 
I, may withdraw distilled spirits or wine from any distilled spirits 
plant or bonded wine cellar, as the case may be, without payment of tax, 
for use in the manufacture of products for export, or for shipment in 
bond to Puerto Rico, or for use by foreign governments, organizations, 
and individuals, as authorized by 26 U.S.C. 5066, 5214(a)(6) and 5362; 
and 19 U.S.C. 1311. The proprietor of the manufacturing bonded warehouse 
shall furnish bond in accordance with the provisions of Sec. 252.63 or 
Sec. 252.64.

(Sec. 311, Tariff Act of 1930, 46 Stat. 691, as amended (19 U.S.C. 
1311); sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1380, as 
amended (26 U.S.C. 5214, 5362); sec. 3, Pub. L. 91-659, 84 Stat. 1965, 
as amended (26 U.S.C. 5066))

[T.D. ATF-88, 46 FR 39814, Aug. 5, 1981]

                        Customs Bonded Warehouses



Sec. 252.26  Entry of distilled spirits into customs bonded warehouses.

    (a) Distilled spirits withdrawn without payment of tax. (1) Bottled 
distilled spirits may, subject to this part, be withdrawn from bonded 
premises for transfer to customs bonded warehouses in which imported 
distilled spirits are permitted to be stored in bond for entry pending 
withdrawal as provided in Sec. 252.27. Withdrawals from bonded premises 
under the provisions of this paragraph shall be treated as withdrawals 
for exportation under the provisions of 26 U.S.C. 5214(a)(4).
    (2) Distilled spirits may, subject to this part, be withdrawn from 
bonded premises for transfer (for the purpose of storage pending 
exportation) to any customs bonded warehouse from which distilled 
spirits may be exported. These withdrawals shall be treated as 
withdrawals for exportation under the provisions of 26 U.S.C. 
5214(a)(9).
    (b) Bottled distilled spirits eligible for export with benefit of 
drawback. Bottled distilled spirits eligible for export with benefit of 
drawback may, subject to

[[Page 102]]

this part, be transferred to customs bonded warehouses in which imported 
distilled spirits are permitted to be stored, and entered pending 
withdrawal as provided in Sec. 252.28, as if such spirits were for 
exportation.
    (c) Time deemed exported. For the purpose of this part, distilled 
spirits entered into a customs bonded warehouse as provided in this 
section shall be deemed exported at the time so entered.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1381, 1382, (26 
U.S.C. 5214); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 
U.S.C. 5066, 5370, 5371; 26 U.S.C. 7805))

[T.D. 7112, 36 FR 8580, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-206, 50 FR 23956, June 7, 1985]



Sec. 252.27  Entry of wine into customs bonded warehouses.

    Upon filing of the application or notice prescribed by 
Sec. 252.122(a), wine may be withdrawn from a bonded wine cellar for 
transfer to any customs bonded warehouse for entry pending withdrawal as 
provided in Sec. 252.28. Such withdrawal from bonded wine cellars is 
governed by the provisions of subpart F of this part. Wine so 
transferred to customs bonded warehouses shall be entered, stored, and 
accounted for in such warehouses under the appropriate provisions of 19 
CFR chapter I.

(Sec. 2, Pub. L. 96-601, 94 Stat. 3495 (26 U.S.C. 5362))

[T.D. ATF-88, 46 FR 39815, Aug. 5, 1981]



Sec. 252.28  Withdrawal of wine and distilled spirits from customs bonded warehouses.

    Wine and bottled distilled spirits entered into customs bonded 
warehouses as provided in Sec. 252.26 (a) or (b) and Sec. 252.27 may, 
under the appropriate provisions of 19 CFR chapter I, be withdrawn from 
such warehouses for consumption in the United States by and for the 
official or family use of foreign governments, organizations, and 
individuals who are entitled to withdraw imported wine and distilled 
spirits from a warehouse free of tax. Distilled spirits and wine entered 
into customs bonded warehouses under the provisions of 
Secs. 252.26(a)(2) and 252.27 may be withdrawn for exportation, subject 
to the provisions of 19 CFR chapter I. Distilled spirits and wine 
transferred to customs bonded warehouses shall be entered into, stored 
and accounted for in, and withdrawn from, such warehouses under the 
appropriate provisions of 19 CFR chapter I. Wine and bottled distilled 
spirits, originally transferred to customs bonded warehouses for the 
purpose of withdrawal by foreign embassies, legations, etc., as 
authorized by law, may be withdrawn from such warehouses for domestic 
use, in which event they shall be treated as American goods exported and 
returned.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214); 
sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066); sec. 
2, Pub. L. 96-601, 94 Stat. 3495 (26 U.S.C. 5362))

[T.D. ATF-88, 46 FR 39815, Aug. 5, 1981]

                           Foreign-Trade Zones



Sec. 252.30  Export status.

    (a) Distilled spirits and wines manufactured, produced, bottled in 
bottles packed in containers, or packaged in casks or other bulk 
containers in the United States, and beer brewed or produced in the 
United States may be transferred to a foreign-trade zone for the sole 
purpose of exportation, or storage pending exportation. Liquors 
deposited in a foreign-trade zone under this part solely for such 
purposes are considered to be exported. Export status is not acquired 
until application on Form 214 for admission of the liquors into the zone 
has been approved by the district director of customs under the 
appropriate provision of 19 CFR chapter I, and the required 
certification of deposit has been made on the ATF form prescribed in 
this part.
    (b) The provisions of subpart H of this part do not apply to 
specially denatured spirits transferred to a foreign-trade zone for use 
in the manufacture of articles pursuant to the provisions of 19 U.S.C. 
81c(c). Transfer of domestic specially denatured spirits to a qualified 
user in a foreign-trade zone is made free of tax under the provisions of 
part 20 of this chapter. Such transfer

[[Page 103]]

does not place the domestic specially denatured spirits in an export 
status.

(48 Stat. 999, as amended (19 U.S.C. 81c))

[T.D. ATF-274, 53 FR 25157, July 5, 1988]

 Voluntary Destruction of Liquors After Receipt in a Foreign-Trade Zone



Sec. 252.35  General.

    Liquors may not, under the law, be transferred to a foreign-trade 
zone for the purpose of destruction. However, liquors transported to and 
deposited in a foreign-trade zone for exportation or for storage pending 
exportation may be destroyed under the supervision of the district 
director of customs, where it is shown to the satisfaction of the 
regional director (compliance) of the region in which the zone is 
located that the liquors, after deposit in a zone, have become 
unmerchantable or unfit for export.

(48 Stat. 999, as amended; 19 U.S.C. 81c)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 252.36  Application.

    Liquors deposited in a foreign-trade zone from the United States 
which have become unmerchantable or unfit for export may be destroyed. 
The exporter shall prepare a letter application, in duplicate, and 
submit it to the regional director (compliance) of the region in which 
the zone is located. The application shall identify the name and address 
of the exporter and contain the following information:
    (a) The kind and quantity of the liquor, the serial numbers, if any, 
of the containers thereof, and identification of the zone in which the 
liquor is stored;
    (b) The name and address of the producer bottler or packager of the 
liquor, and the name, registry number, if any, and location of the 
plant, warehouse or other establishment from which such liquors were 
withdrawn for transportation to and deposit in the foreign-trade zone;
    (c) The date, form, and serial number of the ATF Form 5100.11, 
5110.30, 1582-A, 1582-B, or 1689, as the case may be; and, in the case 
of liquors on which drawback of internal revenue tax has been allowed, 
the claim number assigned thereto by the regional director (compliance);
    (d) Whether the liquor has become unmerchantable or unfit for export 
after deposit in the zone, together with all the known facts relating 
thereto; and
    (e) Whether the unmerchantable or unfit liquor is covered by valid 
insurance in excess of the market value thereof, exclusive of tax. If 
the liquor is insured, the application shall show its market value, the 
amount and date of each and every policy of insurance, the name and 
location of the company by which each and every policy was issued, the 
name and address of the bona fide owner of the liquor, and to the best 
of the affiant's knowledge, whether any other person or party is 
indemnified against the loss of the liquor by reason of its spoilage or 
destruction.

Such application shall be signed by the exporter or his authorized agent 
and be executed under the penalties of perjury. The regional director 
(compliance) may require any further evidence as is deemed necessary. 
The operator of the foreign-trade zone shall countersign the application 
or otherwise indicate thereon his knowledge of and concurrence in the 
application to destroy the liquor. The exporter shall file the 
application with the district director of customs in whose district the 
foreign-trade zone is located; at the same time the exporter shall 
likewise file Zone Form E in accordance with Customs Regulations (19 CFR 
chapter I). On receipt of the application the district director of 
customs shall determine the completeness thereof and shall report any 
facts relating to the condition of the liquor of which he may have 
knowledge. The original application shall be forwarded to the regional 
director (compliance) and the district director of customs shall retain 
the copy for his files.

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 252.36, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

[[Page 104]]



Sec. 252.37  Action by regional director (compliance).

    The regional director (compliance) shall carefully examine the 
application to see that all the required information has been furnished 
and shall cause an investigation to be made or require any additional 
evidence, including samples, to be submitted if necessary. If the 
regional director (compliance) finds that the liquors were transported 
to and deposited in a foreign-trade zone in good faith for the purpose 
of exportation or storage pending exportation, and that the liquors, 
after deposit in the zone, have become unmerchantable or unfit for 
export, he may approve the application and authorize the destruction of 
the liquor described therein under the supervision of the district 
director of customs. On approval or disapproval of the application, the 
regional director (compliance) shall advise the district director of 
customs of his action.

[T.D. ATF-51,43 FR 24244, June 2, 1978]



Sec. 252.38  Action by district director of customs.

    On receipt of the regional director's (compliance) authorization for 
destruction of the liquor, or his disapproval of the application for 
destruction, the district director of customs shall act upon the 
exporter's application on Zone Form E and dispose of it in accordance 
with the applicable provisions of Customs Regulations (19 CFR chapter 
I). Where the regional director (compliance) has authorized the 
destruction of the liquor, such destruction shall be accomplished under 
customs supervision.

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

                     Evidence of Exportation and Use



Sec. 252.40  Evidence of exportation: distilled spirits and wine.

    The exportation of any shipment of distilled spirits or wine may be 
evidenced by:
    (a) A copy of the export bill of lading (Sec. 252.250); or
    (b) A copy of the railway express receipt (Sec. 252.251); or
    (c) A copy of the air express receipt (Sec. 252.252); or
    (d) A copy of the through bill of lading where exportation is to a 
contiguous foreign country (Sec. 252.250); or
    (e) A certificate by the export carrier, as provided for in 
Sec. 252.253.

(72 Stat. 1334, 1335, 1336, 1362, 1380; 26 U.S.C. 5053, 5055, 5062, 
5214, 5362)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-224, 51 FR 7698, Mar. 5, 1986]



Sec. 252.41  Evidence of lading for use on vessels or aircraft: distilled spirits and wine.

    The lading of distilled spirits or wine for use on vessels or 
aircraft may be evidenced by submission of a receipt procured under the 
provisions of Sec. 252.268.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 201, Pub. L. 85-859; 72 Stat. 1362, as amended, 1380, as 
amended (26 U.S.C. 5214, 5362))

[T.D. ATF-224, 51 FR 7698, Mar. 5, 1986]



Sec. 252.42  Evidence of deposit.

    The deposit of distilled spirits in a customs bonded warehouse or 
distilled spirits and wines in a foreign-trade zone with benefit of 
drawback may be evidenced by a copy of the transportation bill of lading 
obtained under the provisions of Sec. 252.250.

(48 Stat. 999, as amended, 84 Stat. 1965; 19 U.S.C. 81c, 26 U.S.C. 5066)

[T.D. 7112, 36 FR 8580, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 252.43  Evidence of exportation and lading for use on vessels and aircraft: beer.

    (a) Exportation. The exportation of beer to a foreign country or 
possession will be fully evidenced by any of the following documents:
    (1) Customs certification of lading and clearance on Form 1582-B or 
Form 1689 under subpart M of this part; or
    (2) For shipment to the armed forces, certification by a military 
officer on Form 1582-B or Form 1689 under Sec. 252.275; or
    (3) A bill of lading (Sec. 252.250), a railway express receipt 
(Sec. 252.251), or an air express or air freight bill of lading 
(Sec. 252.252), when such bills of lading or

[[Page 105]]

receipt show exportation to a foreign country or possession; or
    (4) A certificate issued by an export carrier under Sec. 252.253 
attesting to exportation to a foreign country or possession; or
    (5) A landing certificate issued by an official of the country or 
possession where the beer has actually landed; or
    (6) Any other evidence of exportation approved by the regional 
director (compliance).
    (b) Use as supplies on vessels and aircraft. The lading of beer for 
use on vessels or aircraft will be fully evidenced by:
    (1) For fishing vessels only, customs certification of lading and 
use on Form 1582-B or Form 1689 under Sec. 252.23; or
    (2) Customs certification of lading on Form 1582-B or Form 1689 
under Secs. 252.264 or 252.282; or
    (3) Any other evidence of exportation approved by the regional 
director (compliance).

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as 
amended (26 U.S.C. 5053, 5055))

[T.D. ATF-224, 51 FR 7698, Mar. 5, 1986]

                          Retention of Records



Sec. 252.45  Retention of records.

    File copies of forms required by this part to be retained by any 
proprietor or claimant, and all records, documents, or copies of records 
and documents supporting such forms, shall be preserved by such 
proprietor or claimant for a period of not less than two years, and 
during such period shall be available, during business hours, for 
inspection and the taking of abstracts therefrom by ATF officers.

(Approved by the Office of Management and Budget under control number 
1512-0385)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1381, as amended, 
1390, as amended, 1395, as amended (26 U.S.C. 5114, 5367, 5415, 5555); 
sec. 807, Pub. L. 96-39, 93 Stat. 283 (26 U.S.C. 5207))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71721, Dec. 11, 1979; T.D. ATF-172, 49 
FR 14943, Apr. 16, 1984]

                          Penalties of Perjury



Sec. 252.48  Execution under penalties of perjury.

    When a return, form, or other document called for under this part is 
required by this part or in the instructions on or with the return, 
form, or other document to be executed under penalties of perjury, it 
shall be so executed, as defined in subpart B of this part, and shall be 
signed by the proprietor, or other duly authorized person.

(68A Stat. 749 (26 U.S.C. 6065))



                 Subpart D--Bonds and Consents of Surety



Sec. 252.51  General.

    Every person required by this part to file a bond or consent of 
surety shall prepare and execute it on the prescribed form and file it 
with the regional director (compliance) of the region in which is 
located the premises from which the withdrawal or removal of spirits or 
wines is made without payment of tax, or, in the case of taxpaid or tax-
determined spirits or wines on which claim for drawback of tax will be 
filed, with the regional director (compliance) for the region in which 
the claim will be filed, in accordance with the procedures of this part. 
The procedures in parts 19, 25 or 240 of this chapter shall govern bonds 
covering distilled spirits plants, bonded wine cellars and breweries, 
respectively.

[T.D. ATF-62, 44 FR 71721, Dec. 11, 1979, as amended by T.D. ATF-224, 51 
FR 7698, Mar. 5, 1986]



Sec. 252.52  Corporate surety.

    (a) Surety bonds required by this part may be given only with 
corporate sureties holding certificates of authority from, and subject 
to the limitations prescribed by, the Secretary as set forth in the 
current revision of Treasury Department Circular No. 570 (Companies 
Holding Certificates of Authority as Acceptable Sureties on Federal 
Bonds and as Acceptable Reinsuring Companies).
    (b) Treasury Department Circular No. 570 is published in the Federal

[[Page 106]]

Register annually as of the first workday of July. As they occur, 
interim revisions of the circular are published in the Federal Register. 
Copies may be obtained from the Audit Staff, Bureau of Government 
Financial Operations, Department of the Treasury, Washington, DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7))

[T.D. ATF-92, 46 FR 46921, Sept. 23, 1981]



Sec. 252.52a  Filing of powers of attorney.

    Each bond, and each consent to changes in the terms of a bond, shall 
be accompanied by a power of attorney authorizing the agent or officer 
who executed the bond or consent to so act on behalf of the surety. The 
regional director (compliance) who is authorized to approve the bond, 
may, when he deems it necessary, require additional evidence of the 
authority of the agent or officer to execute the bond or consent.

(61 Stat. 648; 6 U.S.C. 6, 7)

[T.D. 6895, 31 FR 11976, Sept. 13, 1966. Redesignated at 40 FR 16835, 
Apr. 15, 1975]



Sec. 252.52b  Execution of powers of attorney.

    The power of attorney shall be prepared on a form provided by the 
surety company and executed under the corporate seal of the company. If 
the power of attorney submitted is other than a manually signed 
original, it shall be accompanied by certification of its validity.

(61 Stat. 648; 6 U.S.C. 6, 7)

[T.D. 6895, 31 FR 11976, Sept. 13, 1966. Redesignated at 40 FR 16835, 
Apr. 15, 1975]



Sec. 252.53  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the principal may pledge and deposit, 
as surety for his bond, securities which are transferable and are 
guaranteed as to both interest and principal by the United States, in 
accordance with the provisions of 31 CFR part 225.

(61 Stat. 650; 6 U.S.C. 15)



Sec. 252.54  Consents of surety.

    Consents of surety to changes in the terms of bonds shall be 
executed on Form 1533 by the principal and by the surety with the same 
formality and proof of authority as is required for the execution of 
bonds.



Sec. 252.55  Authority to approve bonds and consents of surety.

    Regional directors (compliance) are authorized to approve all bonds 
and consents of surety required by this part.



Sec. 252.56  Disapproval of bonds or consents of surety.

    The regional director (compliance) may disapprove any bond 
prescribed by this part, or any consent of surety submitted in respect 
thereto, if the principal or any person owning, controlling, or actively 
participating in the management of the business of the principal shall 
have been previously convicted, in a court of competent jurisdiction, 
of:
    (a) Any fraudulent noncompliance with any provision of any law of 
the United States, if such provision related to internal revenue or 
customs taxation of spirits, wines, or beer, or if such offense shall 
have been compromised with the person on payment of penalties or 
otherwise; or
    (b) Any felony under a law of any State, Territory, or the District 
of Columbia, or the United States, prohibiting the manufacture, sale, 
importation, or transportation of spirits, wine, beer, or other 
intoxicating liquor.

(72 Stat. 1336, 1352, 1353, 1394; 26 U.S.C. 5062, 5175, 5177, 5551)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71721, Dec. 11, 1979]



Sec. 252.57  Appeal to Director.

    Where a bond or consent of surety is disapproved by the regional 
director (compliance), the person giving the bond may appeal from such 
disapproval to the Director, who will hear such appeal. The decision of 
the Director shall be final.

(72 Stat. 1394; 26 U.S.C. 5551)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

[[Page 107]]



Sec. 252.58  Operations or unit bond--distilled spirits.

    (a) Spirits. Where spirits are withdrawn without payment of tax, as 
authorized in Sec. 252.91, from the bonded premises of a distilled 
spirits plant on application of the proprietor thereof, the operations 
or unit bond, given by the proprietor and approved under the provisions 
of part 19 of this chapter, shall cover such withdrawals.
    (b) Wine. Where, under the provisions of part 19 of this chapter, an 
operations or unit bond has been given and approved to cover the 
operations of a distilled spirits plant and an adjacent bonded wine 
cellar, such bond shall cover the withdrawal of wine without payment of 
tax, as authorized in Sec. 252.121, from such bonded wine cellar on 
application for such withdrawal by the proprietor.
    (c) Specially denatured spirits. Where specially denatured spirits 
are withdrawn free of tax, as authorized in Sec. 252.151, from the 
bonded premises of a distilled spirits plant on application of the 
proprietor thereof, the proprietor shall file a consent of surety 
extending the terms of the operations or unit bond, which consent shall 
be in the following form:

    The obligors agree to extend the terms of said bond to cover all 
liability that may be incurred on all specially denatured spirits 
withdrawn by the principal for exportation or transfer to a foreign-
trade zone, for which satisfactory evidence of exportation, or of 
deposit in a foreign-trade zone, as required by law and regulations, is 
not submitted to the regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1362, as amended 
(26 U.S.C. 5175, 5214); Sec. 3, Pub. L. 91-659, 84 Stat. 1965, as 
amended (26 U.S.C. 5066); Sec. 805, Pub. L. 96-39, 93 Stat. 276 (26 
U.S.C. 5173))

[T.D. ATF-62, 44 FR 71721, Dec. 11, 1979]



Sec. 252.59  Bond, Form 700.

    Where the operations of a bonded wine cellar are covered by bond, 
Form 700, as provided in part 24 of this chapter, such bond shall cover 
the withdrawal of wine without payment of tax, as authorized in 
Sec. 252.121, from such bonded wine cellar by the proprietor of the 
bonded wine cellar.

(72 Stat. 1379, 1380; 26 U.S.C. 5354, 5362, as amended by T.D. ATF-299, 
55 FR 25033, June 19, 1990]



Sec. 252.60  Brewer's bond, Form 5130.22.

    When beer or beer concentrate is removed from a brewery without 
payment of tax for any of the purposes authorized in Sec. 252.141, the 
brewer's bond, Form 5130.22, furnished under the provisions of part 25 
of this chapter will cover the removals.

(49 Stat. 999, as amended (19 U.S.C. 81c); sec. 201, Pub. L. 85-859, 72 
Stat. 1334, as amended, 1388, as amended (26 U.S.C. 5053, 5401))

[T.D. ATF-224, 51 FR 7698, Mar. 5, 1986]



Sec. 252.61  Bond, Form 2734 (5100.25).

    If a specific lot of distilled spirits or wine is to be withdrawn 
without payment of tax, as authorized in Sec. 252.91(a)(1), (2), (3), 
(5), or Sec. 252.121(a), (b), (c), or (d), by a person other than the 
proprietor of the bonded premises, a specific bond on ATF Form 2734 
(5100.25) shall be filed by the exporter with the regional director 
(compliance), as provided in Sec. 252.51. The penal sum of the bond 
shall not be less than the tax prescribed by law on the quantity of 
spirits or wine to be withdrawn. However, the maximum penal sum of the 
bond shall not exceed $200,000 but in no case shall the penal sum be 
less than $1,000.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1362, as amended, 
1380, as amended, 1381, 1382 (26 U.S.C. 5175, 5214, 5362) sec. 3. Pub. 
L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066, 5370, 5371))

[T.D. ATF-88, 46 FR 39815, Aug. 5, 1981]



Sec. 252.62  Bond, Form 2735 (5100.30).

    (a) Requirement for bond. If a person other than the proprietor of 
the bonded premises withdraws distilled spirits or wine without payment 
of tax, as authorized by Sec. 252.91(a)(1), (2), (3), (5), or 
Sec. 252.121(a), (b), (c), or (d), the exporter shall file a continuing 
bond, ATF Form 2735 (5100.30), with the regional director (compliance), 
as provided in Sec. 252.51.
    (b) Penal sum of bond. The penal sum of the bond shall be sufficient 
to cover the tax on the maximum quantity of

[[Page 108]]

distilled spirits and wine that may remain unaccounted for at any one 
time. However, the maximum penal sum of the bond shall not exceed 
$200,000, but in no case shall the penal sum be less than $1,000. 
Distilled spirits and wine withdrawn for exportation, use on vessels or 
aircraft, transfer to a customs bonded warehouse, or transfer to and 
deposit in a foreign-trade zone, shall remain unaccounted for until the 
evidence of exportation, use, deposit, transfer, or loss in transit has 
been filed with the regional director (compliance).
    (c) Apportioning bonds. If the bond, Form 2735 (5100.30), is in less 
than the maximum penal sum, the principal shall apportion the bond, in 
accordance with the requirements on the bond form. The exporter may 
reapportion the bond coverage, if changing conditions make this 
necessary, by filing a consent of surety, ATF Form 1533 (5000.18), for 
approval by the Director of Industry Operations (DIO).
    (d) Withdrawal of wine for transfer to a customs bonded warehouse; 
consent of surety. An exporter with a bond on Form 2735 (5100.30) 
executed before April 1, 1981, shall obtain a consent of surety on Form 
1533 (5000.18) before withdrawing wine without payment of tax from a 
bonded wine cellar for transfer to a customs bonded warehouse. The 
consent shall be executed in accordance with Sec. 252.54 and filed in 
accordance with instructions on the form. Exporters with bonds executed 
on or after April 1, 1981, do not need this consent of surety, because 
such bonds automatically apply to withdrawals for transfer to customs 
bonded warehouses.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1362, as amended, 
1380, as amended, 1381, 1382 (26 U.S.C. 5175, 5214, 5362) sec. 3. Pub. 
L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066, 5370, 5371))

[T.D. ATF-88, 46 FR 39815, Aug. 5, 1991, as amended by T.D. ATF-413, 64 
FR 46845, Aug. 27, 1999]



Sec. 252.63  Bond, Form 2736.

    Where the proprietor of a manufacturing bonded warehouse desires to 
withdraw a specific lot of distilled spirits or wines without payment of 
tax, as authorized in Sec. 252.25, he shall file with the regional 
director (compliance), as provided in Sec. 252.51, a specific bond, on 
Form 2736, to cover the transportation of the distilled spirits or wines 
from the bonded premises from which withdrawn to the manufacturing 
bonded warehouse. The penal sum of such bond shall be not less than the 
tax prescribed by law on the quantity of distilled spirits or wines to 
be withdrawn: Provided, That the maximum penal sum of such bond shall 
not exceed $200,000, but in no case shall the penal sum be less than 
$1,000.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1380, as amended 
(26 U.S.C. 5175, 5362))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71721, Dec. 11, 1979]



Sec. 252.64  Bond, Form 2737.

    (a) General. Where the proprietor of a manufacturing bonded 
warehouse desires to withdraw distilled spirits and wines from time to 
time without payment of tax, as authorized in Sec. 252.25, he shall file 
with the regional director (compliance), as provided in Sec. 252.51, a 
continuing bond on Form 2737. The bond shall be executed in a penal sum 
sufficient to cover the tax at the rates prescribed by law on the 
maximum quantity of distilled spirits and wines which may remain 
unaccounted for at any one time: Provided, That the maximum penal sum of 
such bond shall not exceed $200,000, but in no case shall the penal sum 
be less than $1,000. Distilled spirits and wines withdrawn for transfer 
to a manufacturing bonded warehouse shall remain unaccounted for until 
the evidence of deposit in such warehouse, as required by this part, has 
been filed with the regional director (compliance). The proprietor 
shall, at the time of executing Form 2737, designate the premises from 
which the withdrawals are to be made, provided that, as to any one bond 
on Form 2737, such premises shall be located in the same internal 
revenue region.
    (b) Apportioning bonds. If the bond, Form 2737 is in less than the 
maximum penal sum, the principal shall apportion the bond, in accordance 
with the requirements on the bond form. The principal may reapportion 
the bond coverage, if changing conditions make

[[Page 109]]

this necessary, by filing a consent of surety, Form 1533, for approval 
by the regional regulatory administrator.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1380, as amended 
(26 U.S.C. 5175, 5362))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71721, Dec. 11, 1979]



Sec. 252.65  Bond, Form 2738.

    Whenever, under the provisions of this part, the claimant desires 
drawback of tax on distilled spirits or wines to be exported, laden for 
use on vessels or aircraft, or transferred to and deposited in a 
foreign-trade zone, or, in the case of distilled spirits, transferred to 
a customs bonded warehouse, as authorized in Secs. 252.171 and 252.211, 
prior to the receipt by the regional regulatory administrator of the 
certified copy of ATF Form 5110.30, or 1582-A, as the case may be, as 
prescribed by this part, he shall file bond on Form 2738 with the 
regional regulatory administrator as provided in Sec. 252.51. The penal 
sum of the bond shall be sufficient to cover the amount of drawback 
which will at any time constitute a charge against the bond:

Provided, That the maximum penal sum shall not exceed $200,000, but in 
no case shall the penal sum be less than $1,000: Provided further, That 
where the claimant desires to remove distilled spirits to a customs 
bonded warehouse as provided in Sec. 252.171(d) and the terms of his 
bond on Form 2738, then in force, do not cover such removals, he shall 
either file a consent of surety on Form 1533 to extend the terms of such 
bond to cover such removals or file a new bond on Form 2738.

(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1336, as 
amended, 84 Stat. 1965; 19 U.S.C. 1309, 81c, 26 U.S.C. 5062, 5066)

[T.D. 7112, 36 FR 8580, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71721, Dec. 11, 1979; T.D. 
ATF-198, 50 FR 8559, Mar. 1, 1985]



Sec. 252.66  Strengthening bonds.

    In all cases where the penal sum of any bond becomes insufficient, 
the principal shall either give a strengthening bond with the same 
surety to attain a sufficient penal sum, or give a new bond to cover the 
entire liability. Strengthening bonds will not be approved where any 
notation is made thereon which is intended, or which may be construed, 
as a release of any former bond, or as limiting the amount of any bond 
to less than its full penal sum. Strengthening bonds shall show the 
current date of execution and the effective date.

(72 Stat. 1352, 1394; 26 U.S.C. 5175, 5551)



Sec. 252.67  New or superseding bonds.

    New bonds shall be required in case of insolvency or removal of any 
surety, and may, at the discretion of the regional director 
(compliance), be required in any other contingency affecting the 
validity or impairing the efficiency of such bond. Executors, 
administrators, assignees, receivers, trustees, or other persons acting 
in a fiduciary capacity, continuing or liquidating the business of the 
principal, shall execute and file a new bond or obtain the consent of 
the surety or sureties on the existing bond or bonds. Where, under the 
provisions of Sec. 252.72, the surety on any bond given under this 
subpart has filed an application to be relieved of liability under said 
bond and the principal desires or intends to continue the business or 
operations to which such bond relates, he shall file a valid superseding 
bond to be effective on or before the date specified in the surety's 
notice. If the principal does not file a new or superseding bond when 
required, he shall discontinue the operations intended to be covered by 
such bond forthwith. New or superseding bonds shall show the current 
date of execution and the effective date.

(72 Stat. 1336, 1362; 26 U.S.C. 5062, 5214)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71722, Dec. 11, 1979]

                          Termination of Bonds



Sec. 252.70  Termination of bonds, Forms 2734 and 2736.

    Bonds, Forms 2734 and 2736, covering a specific lot of distilled 
spirits or wines withdrawn without payment of tax under this part, will 
be canceled by the regional director (compliance) on

[[Page 110]]

receipt by him of ATF Form 5100.11 properly executed by the appropriate 
customs official or armed services officer, as required by this part, 
evidencing that the distilled spirits or wines have been duly exported, 
laden for use on vessels or aircraft, deposited in a foreign-trade zone, 
or deposited in a manufacturing bonded warehouse, as the case may be, or 
of evidence satisfactory to him that the distilled spirits or wines have 
been otherwise lawfully disposed of or accounted for: Provided, That all 
liability under the bond to be canceled has been terminated.

(72 Stat. 1352; 26 U.S.C. 5175)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71722, Dec. 11, 1979]



Sec. 252.71  Termination of bonds, Forms 2735, 2737, and 2738.

    Continuing bonds, Forms 2735 and 2737, covering distilled spirits 
and/or wines withdrawn from time to time without payment of tax under 
this part and Form 2738 covering allowance of claims for drawback on 
distilled spirits and/or wines removed as authorized in Secs. 252.171 
and 252.211, may be terminated as to liability for future withdrawals or 
claims (a) pursuant to application of surety as provided in Sec. 252.72, 
(b) on approval of a superseding bond, or (c) on written notification to 
the regional director (compliance) by the principal of his 
discontinuance of withdrawals or claims, as the case may be, under the 
bond. When no further withdrawals are to be made under a bond on Form 
2735 or 2737, or no further claims for drawback are to be filed under 
bond Form 2738, the bond shall be canceled by the regional director 
(compliance) in the manner and subject to the conditions provided in 
Sec. 252.70.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended, 1352, as amended, 
1353, as amended (26 U.S.C. 5062, 5175, 5176))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 
1975,and amended by T.D. ATF-62, 44 FR 71722, Dec. 11, 1979; T.D. ATF-
198, 50 FR 8559, Mar. 1, 1985]



Sec. 252.72  Application of surety for relief from bond.

    A surety on any bond given on Forms 2735, 2737, or 2738, may at any 
time in writing notify the principal and the regional director 
(compliance) in whose office the bond is on file that he desires, after 
a date named, to be relieved of liability under said bond. Such date 
shall be not less than 90 days after the date the notice is received by 
the regional director (compliance). The surety shall also file with the 
regional director (compliance) an acknowledgment or other proof of 
service on the principal. If such notice is not thereafter in writing 
withdrawn, the rights of the principal as supported by said bond shall 
be terminated on the date named in the notice, and the surety shall be 
relieved from liability to the extent set forth in Sec. 252.73(b).

(68A Stat. 749, as amended (26 U.S.C. 6065); Sec. 201. Pub. L. 85-859, 
72 Stat. 1336, as amended, 1352, as amended (26 U.S.C. 5062, 5175))

[T.D. 6895, 31 FR 11976, Sept. 13, 1966. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-62, 44 FR 71722, Dec. 11, 1979]



Sec. 252.73  Relief of surety from bond.

    (a) Bonds, Forms 2734 and 2736. The surety on a bond given on Form 
2734 or Form 2736 shall be relieved from his liability under the bond 
when the bond has been canceled as provided for in Sec. 252.70.
    (b) Bonds, Forms 2735, 2737, and 2738. Where the surety on a bond 
given on Form 2735, Form 2737, or on Form 2738 has filed application for 
relief from liability, as provided in Sec. 252.72, the surety shall be 
relieved from liability for withdrawals or claims, as the case may be, 
made wholly subsequent to the date specified in the notice, or on the 
effective date of a superseding bond, if one is given. Notwithstanding 
such relief, the liability of the surety shall continue until the 
spirits and/or wines withdrawn without payment of tax or included in a 
claim for drawback of tax allowed under the bond have been properly 
accounted for.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended, 1352, as amended, 
1353, as amended (26 U.S.C. 5062, 5175, 5176))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71722, Dec. 11, 1979]

[[Page 111]]



Sec. 252.74  Release of pledged securities.

    Securities of the United States, pledged and deposited as provided 
in Sec. 252.53, shall be released only in accordance with the provisions 
of 31 CFR part 225. Such securities will not be released by the regional 
director (compliance) until liability under the bond for which they were 
pledged has been terminated. When the regional director (compliance) is 
satisfied that they may be released, he shall fix the date or dates on 
which a part or all of such securities may be released. At any time 
prior to the release of such securities, the regional director 
(compliance) may extend the date of release for such additional length 
of time as he deems necessary.

(61 Stat. 650; 6 U.S.C. 15)

                           Charges and Credits



Sec. 252.80  Charges and credits on bonds.

    The withdrawal of liquors without payment of tax or of specially 
denatured spirits free of tax, under the provisions of this part shall 
constitute a charge against the bond under which the withdrawal is made 
of (a) the tax on the liquors withdrawn or (b) of an amount equal to the 
tax on specially denatured spirits withdrawn that will be due in the 
event of failure to account for the specially denatured spirits as 
provided in this part. The tax on liquors so withdrawn, or an amount 
equal to the tax on specially denatured spirits so withdrawn that would 
be due as set forth above, shall, on the required accounting for such 
liquors or specially denatured spirits, constitute a credit to the bond 
of such tax or amount equal to the tax, as the case may be. Provisions 
regarding charges and credits on drawback bonds are contained in subpart 
P of this part.



 Subpart E--Withdrawal of Distilled Spirits Without Payment of Tax for 
 Exportation, Use on Vessels and Aircraft, Transfer to a Foreign-Trade 
       Zone, or Transportation to a Manufacturing Bonded Warehouse



Sec. 252.91  General.

    (a) Distilled spirits on which the internal revenue tax has not been 
paid or determined may, subject to this part, be withdrawn from the 
bonded premises of a distilled spirits plant without payment of tax for:
    (1) Exportation;
    (2) Use on the vessels or aircraft described in Sec. 252.21;
    (3) Transfer to and deposit in a foreign-trade zone for exportation 
or for storage pending exportation;
    (4) Transportation to and deposit in a manufacturing bonded 
warehouse; or
    (5) Transfer to and deposit in a customs bonded warehouse as 
provided for in Sec. 252.26.
    (b) All withdrawals shall be made under the applicable bond 
prescribed in subpart D of this part.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 
5214); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 
5066))

[T.D. ATF-51, 43 FR 24244, June 2, 1978, as amended by T.D. ATF-62, 44 
FR 71722, Dec. 11, 1979]



Sec. 252.92  Application or notice, ATF Form 5100.11.

    (a) Export, use on vessels and aircraft, and transfer to a foreign-
trade zone or a customs bonded warehouse. Application for or notice of 
the withdrawal of distilled spirits without payment of tax for 
exportation from the United States, or for use on vessels and aircraft, 
or for transfer to a customs bonded warehouse or a foreign-trade zone, 
shall be made by the exporter on ATF Form 5100.11. If the exporter is 
not the proprietor of the bonded premises of the

[[Page 112]]

distilled spirits plant from which the spirits are to be withdrawn, the 
exporter shall prepare ATF Form 5100.11 as an application, in accordance 
with the instructions on the form, and shall forward all copies of the 
form to the regional director (compliance) of the region in which the 
distilled spirits plant is located. If the exporter is the proprietor of 
the bonded premises of the distilled spirits plant from which the 
spirits are withdrawn, the exporter shall prepare ATF Form 5100.11 as a 
notice in accordance with the instructions on the form.
    (b) Manufacturing bonded warehouse. Application for the withdrawal 
of distilled spirits without payment of tax for transportation to and 
deposit in a manufacturing bonded warehouse shall be made by the 
proprietor of such warehouse on ATF Form 5100.11, in accordance with the 
instructions on the form.

(Approved by the Office of Management and Budget under control number 
152-0190)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214); 
Sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066))

[T.D. ATF-198, 50 FR 8559, Mar. 1, 1985]



Sec. 252.93  Carrier to be designated.

    The name of the carrier or carriers to be used in transporting the 
distilled spirits from the bonded premises of the distilled spirits 
plant to the port of export, or to the customs bonded warehouse, or to 
the manufacturing bonded warehouse, or to the foreign-trade zone, as the 
case may be, shall be shown in the application. If the spirits are 
shipped on a through bill of lading and all carriers handling the 
spirits while in transit are not known, the name of the carrier to whom 
the distilled spirits are to be delivered at the shipping premises shall 
be shown.

(72 Stat. 1362, 84 Stat. 1965; 26 U.S.C. 5214, 5066)

[T.D. 7112, 36 FR 8581, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71722, Dec. 11, 1979]



Sec. 252.94  Containers.

    Distilled spirits authorized to be withdrawn without payment of tax 
from the bonded premises of a distilled spirits plant under the 
provisions of this subpart may be withdrawn from such establishment in 
such containers as may be authorized in part 19 of this chapter. Except 
as otherwise provided in this part, the gauging, packing, bottling, 
casing, marking, closing and reporting of distilled spirits prior to 
withdrawal shall be in accordance with the provisions of part 19 of this 
chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1360, as amended, 
1374, as amended (26 U.S.C. 5205, 5206, 5301))

[T.D. ATF-62, 44 FR 71722, Dec. 11, 1979; as amended by T.D. ATF-206, 50 
FR 23956, June 7, 1985]



Sec. 252.95  Change of packages for exportation.

    Whenever the exporter desires to transfer distilled spirits from 
packages filled in internal revenue bond to such other suitable packages 
as may be desired for exportation, such change of packages shall be made 
under the procedures of part 19 of this chapter, prior to the 
preparation of ATF Form 5100.11 covering the removal of the distilled 
spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1360, as amended, 
1374, as amended (26 U.S.C. 5205, 5206, 5301))

[T.D. ATF-62, 44 FR 71722, Dec. 11, 1979]



Sec. 252.96  Approval of application.

    When filed as an application, and ATF Form 5100.11 has been properly 
executed, and the required bond has been filed in a sufficient amount, 
the regional director (compliance) shall approve the application on all 
copies of the form and send them to the proprietor of the bonded 
premises from which the spirits will be withdrawn.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))

[T.D. ATF-62, 44 FR 71722, Dec. 11, 1979, as amended by T.D. ATF-198, 50 
FR 8559, Mar. 1, 1985]



Sec. 252.97  [Reserved]



Sec. 252.98  Inspection and regauge.

    The proprietor shall inspect all containers to be withdrawn pursuant 
to ATF Form 5100.11 and shall regauge all packages, except those which 
are to be

[[Page 113]]

withdrawn on the filling or production gauge as authorized in 27 CFR 
part 19. If the withdrawal is to be made subject to regauge, the 
proprietor shall prepare a package gauge record as provided in 27 CFR 
part 19, enter the total proof gallons regauged on ATF Form 5100.11, and 
attach a copy of the package gauge record to each copy of ATF Form 
5100.11. If a proprietor wishes to reduce the proof of spirits contained 
in packages to be withdrawn pursuant to ATF Form 5100.11, he shall make 
such proof reduction incident to regauge of the packages.

(Approved by the Office of Management and Budget under control number 
1412-0190 and 1512-0250)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

[T.D. ATF-198, 50 FR 8559, Mar. 1, 1985]



Sec. 252.100  [Reserved]



Sec. 252.101  Packages to be stamped.

    Each package and authorized bulk conveyance of spirits (including 
tank cars and tank trucks but not pipelines) withdrawn without payment 
of tax under the provisions of this subpart shall be marked with the 
word ``EXPORT'' in accordance with the provisions of 27 CFR part 19 
prior to its removal from the bonded premises.

(Approved by the Office of Management and Budget under control number 
1512-0189)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5205))

[T.D. ATF-198, 50 FR 8560, Mar. 1, 1985; as amended by T.D. ATF-206, 50 
FR 23956, June 7, 1985]]



Sec. 252.102  Bottles to have closures affixed.

    Every bottle containing distilled spirits to be withdrawn under the 
provisions of this subpart shall have a closure or other device affixed 
in accordance with the provisions of part 19 of this chapter.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23956, June 7, 1985]



Sec. 252.103  Export marks.

    (a) General. In addition to the marks and brands required to be 
placed on packages and cases of distilled spirits at the time they are 
filled under the provisions of part 19 of this chapter, the proprietor 
shall mark the word ``Export'' on the Government side of each case or 
Government head of each container before removal from the bonded 
premises for any exportation authorized under this subpart.
    (b) Exception. When containers are being removed to a contiguous 
manufacturing bonded warehouse, the proprietor need not place the word 
``Export'' on the containers if the regional director (compliance) finds 
the omission will not jeopardize the revenue.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 
5214); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 
5066))

[T.D. ATF-82, 46 FR 21158, Apr. 9, 1981]



Sec. 252.104  Certificates of origin.

    The entry of distilled spirits at ports in certain foreign countries 
is permitted only upon the filing by the importer of an official 
certificate showing the origin and age of such spirits. An ATF officer 
may, on request of the applicant, furnish a certificate showing the 
origin and age of the spirits described on ATF Forms 5100.11 or 5110.30. 
The issuing officer may require supporting documentation to be provided 
by the applicant. Certificates of origin and age shall be furnished on 
Form 2177. Form 2177 may also be issued for distilled spirits removed to 
a foreign-trade zone, in which case the number and location of the 
foreign-trade zone shall be shown on the form in lieu of the name of the 
foreign country.

[T.D. ATF-198, 50 FR 8560, Mar. 1, 1985]



Sec. 252.105  Report of inspection and tax liability.

    When the spirits are ready for shipment, the proprietor shall 
execute his report of inspection and tax liability on all copies of ATF 
Form 5100.11.

(72 Stat. 1362; 26 U.S.C. 5214)

[T.D. ATF-46, 42 FR 44773, Sept. 6, 1977, as amended by T.D. ATF-62, 44 
FR 71723, Dec. 11, 1979]

[[Page 114]]



Sec. 252.106  Consignment, shipment, and delivery.

    The consignment, shipment, and delivery of distilled spirits 
withdrawn without payment of tax under this subpart shall be made under 
the provisions of subpart M.

(72 Stat. 1362; 26 U.S.C. 5214)



Sec. 252.107  Disposition of forms.

    ATF Form 5100.11 and any accompanying package gauge record shall be 
distributed by the proprietor in accordance with the instruction on ATF 
Form 5100.11.

(Approved by the Office of Management and Budget under control number 
1512-0250)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))

[T.D. ATF-198, 50 FR 8560, Mar. 1, 1985]

                                 Losses



Sec. 252.110  Losses.

    Where there has been a loss of distilled spirits while in transit 
from the bonded premises of a distilled spirits plant to a port of 
export, a customs bonded warehouse, a manufacturing bonded warehouse, a 
vessel or aircraft, or a foreign-trade zone, the provisions of subpart O 
of this part, with respect to losses of spirits after withdrawal without 
payment of tax and to claims for remission of the tax thereon, shall be 
applicable.

(72 Stat. 1323, as amended, 84 Stat. 1965; 26 U.S.C. 5008, 5066)

[T.D. 7112, 36 FR 8581, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975]

                  Return of Spirits to Bonded Premises



Sec. 252.115  General.

    Spirits which have been lawfully withdrawn without payment of tax 
under the provisions of this subpart for exportation, or for deposit in 
a foreign-trade zone, a manufacturing bonded warehouse, or a customs 
bonded warehouse, or for use on vessels and aircraft may, subject to the 
requirements of Sec. 252.116, be returned:
    (a) To the bonded premises of a distilled spirits plant for 
redistillation; or
    (b) To the bonded premises from which withdrawn, pending subsequent 
removal for lawful purposes. However, such spirits may only be returned 
before they are exported, deposited in a foreign-trade zone, a 
manufacturing bonded warehouse, or a customs bonded warehouse, or laden 
as supplies upon or used on vessels or aircraft, as the case may be.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365 as amended 
(26 U.S.C. 5214, 5223); Sec. 3, Pub. L. 91-659, 84 Stat. 1365, as 
amended (26 U.S.C. 5066))

[T.D. ATF-198, 50 FR 8560, Mar. 1, 1985]



Sec. 252.116  Notice of return of spirits withdrawn without payment of tax.

    If a proprietor of a distilled spirits plant desires to return 
spirits to his plant as provided in Sec. 252.115, he shall file a notice 
with the regional director (compliance) for the region in which the 
plant is located. A copy of the notice shall be prepared for submission 
to the customs official, as required by Sec. 252.117. The notice shall 
be executed under the penalties of perjury and shall show:
    (a) Name, address, and plant number of the distilled spirits plant 
to which the spirits are to be returned.
    (b) Name, address, and plant number of the distilled spirits plant 
which packaged or bottled the spirits.
    (c) Name, address, and plant number of the distilled spirits plant 
from which the spirits were withdrawn.
    (d) Name and address of the principal on the bond under which the 
spirits were withdrawn.
    (e) Serial number of the ATF Form 5100.11 and the date withdrawn.
    (f) Present location of spirits to be returned.
    (g) Kind of spirits to be returned.
    (h) Number, kind, and serial numbers of the containers to be 
returned. In case of bottled spirits, the number and size of the bottles 
in each case.
    (i) Total quantity in proof gallons of spirits to be returned.
    (j) Reason for return of spirits.

[[Page 115]]

    (k) Disposition to be made of returned spirits, i.e., redistillation 
or return to bonded storage.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended 
(26 U.S.C. 5214, 5223))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71723, Dec. 11, 1979]



Sec. 252.117  Responsibility for return of spirits.

    The principal on the bond under which the spirits were withdrawn 
without payment of tax shall be responsible for arranging the return of 
the spirits to the distilled spirits plant receiving them. The principal 
or his agent shall submit a copy of the notice required by Sec. 252.116 
to the appropriate customs official. If the spirits are returned before 
the ATF Form 5100.11 has been filed with the customs official, the 
principal shall submit the form with the notice. The customs officer 
shall, if the spirits are eligible for return under Sec. 252.115, accept 
the notice as authority for the return of the spirits to the distilled 
spirits plant identified in the notice. The customs officer shall retain 
the notice and shall mark each copy of ATF Form 5100.11 ``Canceled'', 
note the date thereon, return both copies to the principal, and, if the 
spirits are in customs custody, release them for return. The principal 
shall retain one copy of the canceled ATF Form 5100.11 and file one copy 
with the regional director (compliance) identified on the form.

(Sec. 201, Pub. L. 85-859, 72 Stat 1362, as amended, 1365, as amended 
(26 U.S.C. 5214, 5223))

[T.D. ATF-62, 44 FR 71723, Dec. 11, 1979]



Sec. 252.118  Receipt of spirits.

    The receipt, gauge, and disposition of the distilled spirits at the 
distilled spirits plant shall be in accordance with the applicable 
provisions of subpart U of part 19 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat 1362, as amended, 1365, as amended 
(26 U.S.C. 5214, 5223))

[T.D. ATF-62, 44 FR 71723, Dec. 11, 1979]



 Subpart F--Withdrawal of Wine Without Payment of Tax for Exportation, 
 Use on Vessels and Aircraft, Transfer to a Foreign-Trade Zone or to a 
 Customs Bonded Warehouse, or Transportation to a Manufacturing Bonded 
                                Warehouse



Sec. 252.121  General.

    Wine may, subject to this part, be withdrawn from a bonded wine 
cellar, without payment of tax, for:
    (a) Exportation;
    (b) Use on the vessels and aircraft described in Sec. 252.21;
    (c) Transfer to and deposit in a foreign-trade zone for exportation 
or for storage pending exportation;
    (d) Transfer to and deposit in a customs bonded warehouse as 
provided in Sec. 252.27; or
    (e) Transportation to and deposit in a manufacturing bonded 
warehouse.

All such withdrawals shall be made under the applicable bond prescribed 
in subpart D.

(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1380; 19 
U.S.C. 1309, 81c, 26 U.S.C. 5362, 7805; (sec. 201, Pub. L. 85-859. 72 
Stat. 1381, 1382 (26 U.S.C. 5370, 5371)))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71723, Dec. 11, 1979; T.D. ATF-88, 46 
FR 39816, Aug. 5, 1981; 47 FR 20303, May 12, 1982]



Sec. 252.122  Application or notice, ATF Form 5100.11.

    (a) Export, use on vessels and aircraft, transfer to a customs 
bonded warehouse, and transfer to a foreign-trade zone. The exporter 
shall, where he is not the proprietor of the bonded wine cellar from 
which the wine is to be withdrawn, make application on ATF Form 5100.11 
to the regional director (compliance) of the region in which the bonded 
wine cellar is located, for approval of the withdrawal. Where the 
exporter is the proprietor of the bonded wine cellar from which the wine 
is to be withdrawn, he shall, at the time of withdrawal of the wine, 
prepare a notice of the withdrawal and shipment on ATF

[[Page 116]]

For 5100.11. Prior approval by the regional director (compliance) is not 
required when the withdrawal is by the proprietor of the bonded wine 
cellar.
    (b) Manufacturing bonded warehouse. Application for the withdrawal 
of wine without payment of tax for transportation to and deposit in a 
manufacturing bonded warehouse, shall be made by the proprietor of such 
warehouse on ATF Form 5100.11. The proprietor shall forward all copies 
of the application to the regional director (compliance) of the region 
in which is located the bonded wine cellar from which the wine is to be 
withdrawn, for approval prior to withdrawal of the wine.
    (c) Action by regional director (compliance). Where, under the 
provisions of paragraphs (a) and (b) of this section, an ATF Form 
5100.11 is submitted to the regional director (compliance) for approval, 
the regional director (compliance) shall, if satisfied that the 
application is in order and that the applicant has on file a good and 
sufficient bond, approve the application and forward it to the 
proprietor of the premises from which the wines are to be withdrawn.
    (d) Restriction on shipment. Where, under the provisions of 
paragraphs (a) and (b) of this section, prior approval of ATF Form 
5100.11 by the regional director (compliance) is required, the 
proprietor of the bonded wine cellar may not ship the wine until the 
approved ATF Forms 5100.11 have been received by him. In such cases, the 
proprietor of the bonded wine cellar shall, on removal of the wines, 
execute his certificate of removal on ATF Form 5100.11.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended (26 U.S.C. 5362))

[T.D. ATF-198, 50 FR 8560, Mar. 1, 1985]

    Editorial Note: For Federal Register citations affecting 
Sec. 252.122, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 252.123  Export marks.

    (a) General. In addition to the marks and brands required to be 
placed on packages or cases of wine at the time they are filled under 
the provisions of part 24 of this chapter, the proprietor shall mark the 
word ``Export'' on the Government side of each case or Government head 
of each container before removal from the bonded premises for any 
exportation authorized under this subpart, including withdrawals under 
26 U.S.C. 5362(c)(4).
    (b) Exception. When containers are being removed to a contiguous 
manufacturing bonded warehouse, the proprietor need not place the word 
``Export'' on the containers if the regional director (compliance) finds 
the omission will not jeopardize the revenue.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended (26 U.S.C. 
5362, 7805))

[T.D. ATF-82, 46 FR 21158, Apr. 9, 1981, as amended by T.D. ATF-88, 46 
FR 39816, Aug. 5, 1981; 47 FR 20303, May 12, 1982; T.D. ATF-299, 55 FR 
25033, June 19, 1990]



Sec. 252.124  Consignment, shipment, and delivery.

    The consignment, shipment, and delivery of wines withdrawn without 
payment of tax under this subpart shall be made under the provisions of 
subpart M of this part.

(72 Stat. 1380; 26 U.S.C. 5362)



Sec. 252.125  Disposition of forms.

    On removal of the wines from the premises of the bonded wine cellar, 
the proprietor shall forward one copy of ATF Form 5100.11 to the 
regional director (compliance), retain one copy for his files, and 
deliver the original and remaining copy to the officer to whom the 
shipment is consigned, or in whose care it is shipped, as required by 
subpart M. Where the shipment is for delivery for use on aircraft, the 
copy marked ``Consignee's Copy'', provided for in Sec. 252.122, shall be 
forwarded to the airline company at the airport.

(72 Stat. 1380; 26 U.S.C. 5362)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71724, Dec. 11, 1979]



Sec. 252.126  Proprietor's report.

    The records of the proprietor of the bonded wine cellar shall 
reflect the quantity of wine removed without payment of tax under this 
subpart, and he

[[Page 117]]

shall report the quantity of wine so removed on ATF F 5120.17.

(72 Stat. 1380; 26 U.S.C. 5362)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-299, 55 FR 25033, June 19, 1990]



Sec. 252.127  Losses.

    Where there has been a loss of wine while in transit from a bonded 
wine cellar to a port of export, a foreign-trade zone, a vessel or 
aircraft, a customs bonded warehouse, or a manufacturing bonded 
warehouse, the provisions of subpart O of this part, with respect to 
losses of wine after withdrawal without payment of tax and to claims for 
remission of the tax thereon, shall be applicable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, 1382, (26 U.S.C. 5370, 5371))

[T.D. ATF-88, 46 FR 39816, Aug. 5, 1981]

                  Return of Wines to Bonded Wine Cellar



Sec. 252.130  General.

    On application of the proprietor of a bonded wine cellar, wine which 
has been lawfully withdrawn without payment of tax under the provisions 
of this subpart for exportation, or for use on vessels and aircraft, or 
for deposit in a foreign-trade zone, in a manufacturing bonded 
warehouse, or in a customs bonded warehouse, may for good cause be 
returned to the bonded wine cellar from which withdrawn, for storage 
pending subsequent removal for lawful purposes. However, such wine must 
be returned before being exported, laden as supplies or used aboard 
vessels or aircraft, or deposited in a foreign-trade zone, in a 
manufacturing bonded warehouse, or in a customs bonded warehouse, as the 
case may be.

[T.D. ATF-88, 46 FR 39816, Aug. 5, 1981]



Sec. 252.131  Application for return of wines withdrawn without payment of tax.

    Where a proprietor of a bonded wine cellar desires to return wines 
to his bonded wine cellar as provided in Sec. 252.130, he shall submit a 
written application, in duplicate, to the regional director (compliance) 
for the region in which his premises are located, for approval of the 
return of the wines. The application shall show.
    (a) Name, address, and registry number of the bonded wine cellar.
    (b) Name and address of the principal on the bond under which the 
wines were withdrawn.
    (c) Serial number of the ATF Form 5100.11 and the date withdrawn.
    (d) Present location of wines to be returned.
    (e) Kind of wines to be returned.
    (f) Number, kind, and serial numbers of the containers to be 
returned. In the case of bottled wines, the number and size of the 
bottles in each case.
    (g) Total quantity in wine gallons for each separate tax class of 
wines to be returned.
    (h) Reason for return of the wines.

The application shall be executed under the penalties of perjury. On 
approval of the application the regional director (compliance) shall 
return both copies to the proprietor, who, in turn, shall deliver them 
to the exporter.

(72 Stat. 1380; 26 U.S.C. 5362)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71724, Dec. 11, 1979]



Sec. 252.132  Responsibility for return of wine.

    The principal on the bond under which the wines were withdrawn 
without payment of tax shall be responsible for arranging the return of 
the wines to the bonded wine cellar from which they were withdrawn. In 
case of emergency, the principal on the bond may arrange the return of 
wines to bonded premises without an approved application, but such wines 
shall be kept separate at the bonded premises and shall not be recorded 
in the records and reports of the proprietor until an approved 
application for such return has been obtained as provided in 
Sec. 252.131. Such principal or his agent shall present to the 
appropriate customs official the two copies of the approved application 
authorizing the return unless the wines are returned before the ATF Form 
5100.11 has been filed with the customs official. The customs officer 
shall, if he finds that the wines are eligible for return under 
Sec. 252.130, accept the approved application as authority for the 
return of the wines to the bonded wine

[[Page 118]]

cellar noted on the application and shall mark each copy of ATF Form 
5100.11 ``Canceled'', note the date thereon, affix a copy of the 
approved application to each of the canceled ATF Forms 5100.11, return 
both ATF Forms 5100.11 to the principal, and, where the wines are in his 
custody, release them for return. The canceled ATF Forms 5100.11, with 
attachments, shall be delivered by such principal or his agent to the 
proprietor of the bonded wine cellar. When wines have been returned 
before the ATF Forms 5100.11 were filed with customs officials, the two 
copies of the approved application shall be submitted, by the principal 
or his agent, to the proprietor of the bonded wine cellar who shall 
cancel and date each copy of ATF Form 5100.11 and affix copies of the 
approved application thereto.

(72 Stat. 1380; 26 U.S.C. 5362)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71724, Dec. 11, 1979]



Sec. 252.133  Disposition of forms.

    On receipt of the wines at the bonded wine cellar, the proprietor 
shall endorse, on each copy of the approved application to return the 
wines, the date received, the total amount in wine gallons of each tax 
class of wine returned, and affix his signature. He shall forward the 
original ATF Form 5100.11, with attached application, to the regional 
director (compliance) of the region in which his premises are located, 
and retain the remaining copy for his files. The storage, disposition, 
and records pertaining to such returned wines shall be in accordance 
with the applicable provisions of part 240 of this chapter.

(72 Stat. 1380; 26 U.S.C. 5362)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71724, Dec. 11, 1979]



 Subpart G--Removal of Beer and Beer Concentrate Without Payment of Tax 
for Exportation, Use as Supplies on Vessels and Aircraft, or Transfer to 
                          a Foreign-Trade Zone

    Source: T.D. ATF-224, 51 FR 7699, Mar. 5, 1986, unless otherwise 
noted.



Sec. 252.141  General.

    (a) Beer. Beer may, subject to this part, be removed from the 
brewery without payment of tax for:
    (1) Export to a foreign country;
    (2) Use as supplies on the vessels and aircraft described in 
Sec. 252.21; or
    (3) Transfer to and deposit in a foreign-trade zone for exportation 
or for storage pending exportation.
    (b) Beer concentrate. Concentrate, produced from beer under the 
provisions of subpart R of part 25 of this chapter may, subject to this 
part, be removed from the brewery without payment of tax for:
    (1) Export to a foreign country; or
    (2) Transfer to and deposit in a foreign-trade zone for exportation 
or for storage pending exportation.
    (c) Bond. All removals of beer or beer concentrate will be made by 
the brewer under the provisions of the brewer's bond, Form 5130.22 as 
prescribed in Sec. 252.60.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 
5053))



Sec. 252.142  Notice, Form 1689.

    When a brewer intends to remove beer or beer concentrate without 
payment of tax from a brewery for exportation or for transportation to 
and deposit in a foreign-trade zone, or remove beer for use as supplies 
on vessels and aircraft, the brewer shall prepare a notice on Form 1689 
for each withdrawal. The brewer shall execute Form 1689 in 
quadruplicate, except when the shipment is for use on aircraft the 
brewer

[[Page 119]]

shall execute an extra copy which will be marked ``Consignee's Copy.''

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 
5053))



Sec. 252.143  Containers.

    (a) Beer. Beer being exported, used as supplies on vessels and 
aircraft, or transferred to and deposited in a foreign-trade zone, 
without payment of tax, may be removed in bottles, kegs, or bulk 
containers.
    (b) Beer concentrate. Concentrate may not be removed for export, or 
for transfer to and deposit in a foreign-trade zone, in containers of 
the kind ordinarily used by brewers for the removal of beer for 
consumption or sale.



Sec. 252.144  Export marks.

    (a) General Requirement. In addition to the marks and brands 
required to be placed on containers of beer or beer concentrate under 
the provisions of part 25 of this chapter, the brewer shall mark the 
word ``Export'' on each container or case of beer, or the words ``Beer 
concentrate for export'' on each container of beer concentrate, before 
removal from the brewery for any exportation authorized under this 
subpart.
    (b) Exceptions. A brewer need not apply the mark ``Export'' on cases 
of beer being exported under the following circumstances:
    (1) When beer is being directly exported by the brewer, and the 
brewer can furnish documentation (such as an ocean or air freight bill 
of lading, or a foreign landing certificate) that the beer was directly 
exported to a foreign country;
    (2) When cased beer is transferred from a brewery to a foreign-trade 
zone for export or for storage pending exportation; or
    (3) When cased beer is exported to the military.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 
5053))



Sec. 252.145  Consignment, shipment and delivery.

    The consignment, shipment and delivery of beer or beer concentrate 
removed from a brewery without payment of tax under this subpart will be 
in accordance with the applicable provisions of subpart M of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))



Sec. 252.146  Disposition of forms.

    On removal of the beer or beer concentrate withdrawn under the 
provisions of this subpart, the brewer shall forward one copy of Form 
1689 to the regional director (compliance), retain one copy for the 
files, and deliver the original and remaining copy to the officer to 
whom the shipment is consigned, or in whose care it is shipped, as 
required by subpart M of this part. When the shipment is for delivery 
for use on aircraft, the copy marked ``Consignee's Copy,'' provided for 
in Sec. 252.142, will be forwarded to the airline company at the 
airport.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 
5053))



Sec. 252.147  Return of beer or beer concentrate.

    Beer or beer concentrate removed without payment of tax under the 
provisions of this subpart may be returned to be brewery from which 
removed if lading of the beer or beer concentrate is delayed more than 
the period provided in Sec. 252.262 or when the brewer has other good 
cause for return. The brewer shall request the district director of 
customs to release the beer or beer concentrate for return to the 
brewery and, on such release, the district director of customs shall 
endorse both copies of the appropriate Form 1689 to show the release of 
the beer or beer concentrate and shall return the forms to the brewer. 
On return of the beer or beer concentrate to the brewery, the brewer 
shall record the quantity in the brewery daily records, mark the two 
copies of Form 1689 returned by the district director of customs, 
``Canceled--Returned to Brewery,'' and

[[Page 120]]

forward one copy to the regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended 
(26 U.S.C. 5053, 5056))



Sec. 252.148  Brewer's report.

    The brewer's records shall reflect the quantity of beer or beer 
concentrate removed without payment of tax under this subpart, and the 
brewer shall report the quantity of beer or beer concentrate so removed 
on Form 5130.9. The total quantity of beer or beer concentrate involved 
in all export shipments returned during any reporting period will be 
reported as a separate entry on Form 5130.9.

(Approved by the Office of Management and Budget under control number 
1512-0052)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))

[T.D. ATF-224, 51 FR 7699, Mar. 5, 1986, as amended by T.D. ATF-345, 58 
FR 40358, July 28, 1993]



Sec. 252.149  Losses.

    When there has been a loss of beer or beer concentrate while in 
transit from the brewery to a port for exportation, or for lading as 
supplies on a vessel or aircraft, or to a foreign-trade zone, the 
provisions of subpart O of this part, with respect to losses are 
applicable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended 
(26 U.S.C. 5051, 5053))



Sec. 252.150  Charges and credits on bond.

    The removal of beer concentrate from the brewery without payment of 
tax under this subpart will constitute a charge against the brewer's 
bond, Form 5130.22, of an amount equal to the tax which would be due on 
removal for consumption or sale, including penalties and interest, on 
all beer used to produce the concentrate which is removed. The 
satisfactory accounting for concentrate so removed will constitute a 
credit to the bond.

[T.D. ATF-224, 51 FR 7698, Mar. 5, 1986; 51 FR 9190, Mar. 18, 1986]

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended 
(26 U.S.C. 5051, 5053))



 Subpart H--Withdrawal of Specially Denatured Spirits, Free of Tax, for 
             Exportation or Transfer to a Foreign-Trade Zone



Sec. 252.151  General.

    Specially denatured spirits may, under this part, be withdrawn from 
the bonded premises of a distilled spirits plant, free of tax, for:
    (a) Exportation; or
    (b) Transfer to and deposit in a foreign-trade zone for exportation 
or for storage pending exportation.

All such withdrawals shall be made under a consent of surety on the 
proprietor's operations or unit bond, as prescribed in Sec. 252.58(c).

(48 Stat. 999, as amended, 72 Stat. 1362; 19 U.S.C. 81c, 26 U.S.C. 5214)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71724, Dec. 11, 1979]



Sec. 252.152  Notice, ATF Form 5100.11.

    Notice of withdrawal of specially denatured spirits, as authorized 
in Sec. 252.151 shall be made on ATF Form 5100.11 by the proprietor of 
the distilled spirits plant from which the denatured spirits are to be 
withdrawn., Upon removal of the denatured spirits from the bonded 
premises, a copy of the form shall be submitted to the regional director 
(compliance).

[T.D. ATF-198, 50 FR 8560, Mar. 1, 1985]



Sec. 252.153  Withdrawal procedure.

    The provisions of Secs. 252.93, 252.94, 252.98, 252.105, and 252.117 
in respect of method of conveyance, authorized containers, gauging, 
inspection, approval and shipment, report of removal, and disposition of 
forms shall be applicable to specially denatured spirits to be withdrawn 
under the provisions of this subpart.

(48 Stat. 999, as amended, 72 Stat. 1362; 19 U.S.C. 81c, 26 U.S.C. 5214)

[T.D. ATF-46, 42 FR 44774, Sept. 6, 1977]



Sec. 252.154  Export marks.

    In addition to the marks and brands required to be placed on 
packages and cases at the time they are filled under

[[Page 121]]

the provisions of part 19 of this chapter, the proprietor shall mark the 
word ``Export'' on the Government side of each case or Government head 
of each container before removal from the bonded premises for any 
exportation authorized under this subpart.

(Sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 81c); 
sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))

[T.D. ATF-82, 46 FR 21159, Apr. 9, 1981]



Sec. 252.155  Consignment, shipment, and delivery.

    The consignment, shipment, and delivery of specially denatured 
spirits withdrawn free of tax under this subpart shall be made under the 
provisions of subpart M of this part.

(48 Stat. 999, as amended, 72 Stat. 1362; 19 U.S.C. 81c, 26 U.S.C. 5214)



Sec. 252.156  Losses.

    Where there has been a loss of specially denatured spirits while in 
transit from the bonded premises of a distilled spirits plant to a port 
of export or a foreign-trade zone, the exporter shall file claim for 
allowance of the loss in accordance with the provisions of subpart O of 
this part.

        Return of Specially Denatured Spirits to Bonded Premises



Sec. 252.160  General.

    Specially denatured spirits, which have been lawfully withdrawn free 
of tax under the provisions of this part for exportation, or for deposit 
in a foreign-trade zone, may, subject to the requirements of 
Sec. 252.161, be returned:
    (a) To the bonded premises of a distilled spirits plant for 
redistillation; or
    (b) To the bonded premises of any distilled spirits plant pending 
subsequent lawful withdrawal free of tax. However, such specially 
denatured spirits may only be returned before they are exported, or 
deposited in a foreign-trade zone. If the specially denatured spirits 
are to be returned to bonded premises for storage without 
redistillation, the proprietor shall also execute a consent of surety 
Form 1533 to extend the terms of his operations or unit bond to cover 
the return and storage of such specially denatured spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended 
(26 U.S.C. 5214, 5223))

[T.D. ATF-198, 50 FR 8561, Mar. 1, 1985]



Sec. 252.161  Notice of return of specially denatured spirits.

    If a proprietor of a distilled spirits plant desires to return 
specially denatured spirits to his plant as provided in Sec. 252.160, he 
shall file a notice with the regional director (compliance) for the 
region in which his plant is located. A copy of the notice shall be 
prepared for submission to the customs official, as required by 
Sec. 252.162. The notice shall be executed under the penalties of 
perjury and shall show:
    (a) Name, address, and plant number of the distilled spirits plant 
to which the specially denatured spirits are to be returned.
    (b) Name, address, and plant number of the distilled spirits plant 
from which the specially denatured spirits were withdrawn.
    (c) Serial number of the ATF Form 5100.11 and the date withdrawn.
    (d) Present location of specially denatured spirits to be returned.
    (e) Description of the specially denatured spirits--kind, serial 
numbers of containers, and quantity in wine gallons.
    (f) Reason for return of the specially denatured spirits.
    (g) Disposition to be made of specially denatured spirits, i.e. 
redistillation or return to processing on the bonded premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended 
(26 U.S.C. 5214, 5223))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71724, Dec. 11, 1979; T.D. ATF-198, 50 
FR 8561, Mar. 1, 1985]



Sec. 252.162  Responsibility for return of specially denatured spirits.

    The principal on the bond under which the specially denatured 
spirits were withdrawn free of tax shall be responsible for arranging 
the return of the spirits to the distilled spirits plant receiving them. 
The principal or his agent shall submit a copy of the notice

[[Page 122]]

required by Sec. 252.161 to the appropriate customs official. If the 
specially denatured spirits are returned before the ATF Form 5100.11 has 
been filed with the customs official, the principal shall submit the 
form with the notice. The customs officer shall, if the specially 
denatured spirits are eligible for return under Sec. 252.160, accept the 
notice as authority for the return of the specially denatured spirits to 
the distilled spirits plant identified in the notice. The customs 
officer shall retain the notice and shall mark each copy of ATF Form 
5100.11 ``Canceled'', note the date thereon, return both copies to the 
principal, and, if the spirits are in customs custody, release them for 
return. The principal shall retain one copy of the canceled ATF Form 
5100.11 and file one copy with the regional director (compliance) 
identified on the form.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended 
(26 U.S.C. 5214, 5223))

[T.D. ATF-62, 44 FR 71724, Dec. 11, 1979]



Sec. 252.163  Receipt of specially denatured spirits.

    The receipt, gauge, and disposition of the specially denatured 
spirits at the distilled spirits plant shall be in accordance with the 
applicable provisions of subpart U of part 19 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended 
(26 U.S.C. 5214, 5223))

[T.D. ATF-62, 44 FR 71724, Dec. 11, 1979]



  Subpart I--Exportation of Distilled Spirits With Benefit of Drawback



Sec. 252.171  General.

    Distilled spirits manufactured, produced, bottled in bottles, packed 
in containers, or packaged in casks or other bulk containers in the 
United States on which an internal revenue tax has been paid or 
determined, and which have been marked under the provisions of 27 CFR 
part 19 and of this part, as applicable, especially for export with 
benefit of drawback may be:
    (a) Exported;
    (b) Laden for use on the vessels or aircraft described in 
Sec. 252.21; or
    (c) Transferred to and deposited in a foreign-trade zone for 
exportation or for storage pending exportation; or
    (d) Transferred to and deposited in a customs bonded warehouse as 
provided for in Sec. 252.26(b).

On receipt by the regional director (compliance) of required evidence of 
exportation, lading for use, or transfer, there shall be allowed to the 
bottler (or packager) of the spirits, drawback equal in amount to the 
tax found to have been paid or determined on the spirits.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 
5062); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 
5066))

[25 FR 5734, June 23, 1960, as amended by T.D. 7112, 36 FR 8581, May 8, 
1971. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 252.171, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

                      Filing of Notice and Removal



Sec. 252.190  Notice, ATF Form 5110.30.

    Notice of shipment of distilled spirits for export, for use as 
supplies on vessels or aircraft, for deposit in a foreign-trade zone, or 
for deposit in a customs bonded warehouse, shall be prepared by the 
exporter on ATF Form 5110.30, in accordance with the instructions on the 
form.

(48 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1336, as 
amended, 84 Stat. 1965; 19 U.S.C. 1309, 81c, 26 U.S.C. 5062, 5066)

[T.D. ATF-198, 50 FR 8561, Mar. 1, 1985]



Sec. 252.191  [Reserved]



Sec. 252.192  Packages of distilled spirits to be gauged.

    Except for spirits which may be tax determined on the basis of the 
original gauge, spirits in packages which are to be removed for export 
with benefit of drawback, shall be gauged by the distilled spirits plant 
proprietor prior to preparation of notice on ATF Form 5110.30. When 
spirits in packages are gauged, a package gauge record shall be prepared 
by the proprietor, as provided in 27 CFR part 19, and a copy of

[[Page 123]]

the package gauge record shall be attached to each copy of ATF Form 
5110.30 and considered a part of the claim.

(Approved by the Office of Management and Budget under control number 
1512-0250 and 1512-0199)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062))

[T.D. ATF-198, 50 FR 8561, Mar. 1, 1985]



Sec. 252.193  Export marks.

    In addition to the marks and brands required to be placed on 
packages or other bulk containers and cases under the provisions of part 
19 of this chapter, the exporter shall mark the word ``Export'' on the 
Government side of each case or Government head of each container before 
removal for export, for use on vessels or aircraft, or for transfer to a 
foreign-trade zone or a customs bonded warehouse.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 
5062); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 
5066))

[T.D. ATF-82, 46 FR 21159, Apr. 9, 1981]



Secs. 252.194-252.195  [Reserved]



Sec. 252.195a  Claims on spirits tax determined before January 1, 1980.

    The bottler or packager of the spirits shall compute the drawback 
rate, unless the regional director (compliance) established a standard 
drawback rate before January 1, 1980. The bottler or packager shall 
complete parts II and III on both copies of ATF Form 5110.30. If a 
standard drawback rate was established, the date of approval of the 
formula and the number shall be shown in any available space in part II 
of ATF Form 5110.30. The bottler or packager shall file one copy as the 
claim for drawback of tax with the regional director (compliance) of the 
region in which the claimant's premises are located, and retain one copy 
on file. Each claim on ATF Form 5110.30 shall be supported by applicable 
records and supporting documents are required by the instructions on the 
form.

(Approved by the Office of Management and Budget under control number 
1512-0250 and 1512-0199)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062))

[T.D. ATF-198, 50 FR 8561, Mar. 1, 1985]



Sec. 252.195b  Claims on spirits tax determined on and after January 1, 1980.

    (a) Preparation. Claims for drawback of tax on spirits tax 
determined on and after January 1, 1980, and withdrawn for any purpose 
authorized by Sec. 252.171, shall be prepared in duplicate by the 
bottler or packager on parts II and III of ATF Form 5110.30.
    (b) Supporting documents. Each claim shall be supported by an 
invoice, bill of lading or other document which identifies the date of 
tax determination, unless the bill of lading required by Sec. 252.250 
identifies this date. Additional supporting documents are required if 
the claim covers distilled spirits products on which the claimed 
drawback rate exceeds the rate of tax imposed by 26 U.S.C. 5001 or 7652 
on each proof gallon or part thereof of distilled spirits produced in or 
imported into the United States (e.g., a product containing alcoholic 
flavoring materials on which drawback has been claimed by the 
manufacturer of the material under 26 U.S.C. 5131-5134). For each such 
product, the additional supporting documents shall consist of a copy of 
each related dump and batch record, package gauge record as prescribed 
in 27 CFR part 19, and/or bottling and packaging record. The regional 
director (compliance) may also require these or other supporting 
documents for any distilled spirits product.
    (c) Filing. One copy of the claim, with supporting documents, if 
required, shall be filed with the regional director

[[Page 124]]

(compliance). The bottler or packager shall retain the other copy on 
file.

(Approved by the Office of Management and Budget under control number 
1512-0198)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062))

[T.D. ATF-198, 50 FR 8561, Mar. 1, 1985, as amended by T.D. ATF-212, 50 
FR 34123, Aug. 23, 1985]



Sec. 252.196  Consignment, shipment, and delivery.

    The consignment, shipment, and delivery of distilled spirits removed 
under this subpart for export, use on vessels or aircraft, transfer to a 
customs bonded warehouse, or transfer to a foreign-trade zone, shall be 
in accordance with the applicable provisions of subpart M of this part.

(72 Stat. 1336, 84 Stat. 1965; 26 U.S.C. 5062, 5066)

[T.D. 7112, 36 FR 8583, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 252.197  Return of spirits withdrawn for export with benefit of drawback.

    When notice is filed by an exporter as provided in Sec. 252.198, 
spirits on which the tax has been paid or determined, and which were 
withdrawn especially for export with benefit of drawback as provided in 
Sec. 252.171, but which spirits have not been laden for export, laden 
for use, or deposited in a customs bonded warehouse or foreign-trade 
zone, may for good cause be returned under the applicable provisions of 
this part and 27 CFR part 19:
    (a) To the bonded premises of the distilled spirits plant for 
purposes authorized under 26 U.S.C.; or
    (b) To a wholesale liquor dealer; or
    (c) To a taxpaid storeroom.

The export marks on spirits returned under this section shall be removed 
by obliteration, relabeling or recasing.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062))

[T.D. ATF-198, 50 FR 8561, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23956, June 7, 1985]



Sec. 252.198  Notice of return.

    If an exporter desires to return spirits to a distilled spirits 
plant, wholesale liquor dealer or taxpaid storeroom, as provided in 
Sec. 252.197, he shall file a notice, executed under the penalties of 
perjury, with the regional director (compliance) for the region in which 
the claim for drawback of tax was filed. The notice shall be prepared in 
triplicate for submission to the customs official as required in 
Sec. 252.199. The notice shall show the:
    (a) Name, address, and plant number of the distilled spirits plant 
which packaged or bottled the spirits;
    (b) Date and serial number of the ATF Form 5110.30 on which the 
spirits were withdrawn;
    (c) Present location of the spirits to be returned;
    (d) Number, size and identification of the containers;
    (e) Proof of spirits;
    (f) Reason for the return; and
    (g) Planned disposition of the returned spirits.

(Approved by the Office of Management and Budget under control number 
1512-0206)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062))

[T.D. ATF-198, 50 FR 8562, Mar. 1, 1985]



Sec. 252.199  Responsibility for return of spirits withdrawn for export with benefit of drawback.

    The exporter shall be responsible for arranging the return of the 
spirits under this subpart to the proprietor or wholesale liquor dealer 
who will receive them. The exporter or his agent shall submit the 
original and copies of the notice required by Sec. 252.198 to the 
appropriate customs official. If the spirits are returned before ATF 
Form 5110.30 has been filed with the customs official, the exporter 
shall submit Form 5110.30 with the notice. The customs officer shall, if 
the spirits are eligible for return under Sec. 252.197, accept the 
notice as authority for the return of the spirits to the premises 
identified in the notice. The customs official shall acknowledge receipt 
on the notice, retain a copy, and return the original and one copy of 
the notice to the exporter. The exporter shall retain the copy of the 
notice and file the original of the notice with the regional

[[Page 125]]

director (compliance) identified thereon.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062))

[T.D. ATF-198, 50 FR 8562, Mar. 1, 1985]

Subpart J [Reserved]



         Subpart K--Exportation of Wine With Benefit of Drawback



Sec. 252.211  General.

    Wines manufactured, produced, bottled in bottles packed in 
containers, or packaged in casks or other bulk containers in the United 
States on which an internal revenue tax has been paid or determined, and 
which are filled on premises qualified under this chapter to package or 
bottle wines, may, subject to this part, be:
    (a) Exported;
    (b) Laden for use on the vessels or aircraft described in 
Sec. 252.21; or
    (c) Transferred to and deposited in a foreign-trade zone for 
exportation or for storage pending exportation.

On receipt by the regional director (compliance) of required evidence of 
exportation, lading for use, or transfer, there shall be allowed a 
drawback equal in amount to the tax found to have been paid or 
determined on the wines.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); Sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 
5062))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-51, 43 FR 24245, June 2, 1978]



Sec. 252.212  Persons authorized.

    Persons who have qualified under this chapter as proprietors of 
distilled spirits plants, bonded wine cellars, or taxpaid wine bottling 
houses, and persons who are wholesale liquor dealers as defined in 
section 5112, I.R.C., and have paid the required tax as a wholesale 
liquor dealer, are authorized to remove wines under the provisions of 
this subpart.

(72 Stat. 1336; 26 U.S.C. 5062)



Sec. 252.213  [Reserved]



Sec. 252.214  Notice and claim, Form 1582-A.

    Claim for allowance of drawback of internal revenue taxes on wines 
removed under the provisions of Sec. 252.211 and Sec. 252.212, shall be 
prepared by the exporter on Form 1582-A, in quadruplicate: Provided, 
That where the withdrawal is for use on aircraft, an extra copy, marked 
``Consignee's Copy'', shall be prepared. Each Form 1582-A shall be 
given, by the exporter, a serial number beginning with ``1'' for the 
first day of January of each year and running consecutively thereafter 
to December 31, inclusive.

(46 Stat. 690, as amended, 72 Stat. 1336; 19 U.S.C. 1309, 26 U.S.C. 
5062)



Sec. 252.215  Certificate of tax determination, Form 2605.

    Every claim for drawback of tax on Form 1582-A shall be supported by 
a certificate, Form 2605, which shall be executed, in duplicate, (a) by 
the person who withdrew the wine from bond on tax determination, 
certifying that all taxes have been properly determined on such wine, or 
(b) where the wine was bottled or packaged after tax determination, by 
the person who did such bottling or packaging, certifying that the wines 
so bottled or packaged were received in taxpaid status and specifying 
from whom they were so received. The regional director (compliance) may 
require other evidence of tax payment whenever he deems it necessary. It 
shall be the responsibility of the exporter to secure Form 2605, 
properly executed, and to submit the original of such form to the 
regional director (compliance) with whom the claim, Form 1582-A, is 
filed. The exporter shall retain the copy of Form 2605 for his files.

(72 Stat. 1336; 26 U.S.C. 5062)



Sec. 252.216  Export marks.

    In addition to the marks and brands required to be placed on 
packages or other bulk containers and cases under the provisions of 
parts 24 of this chapter, the exporter shall mark the word ``Export'' on 
the Government side of each case or Government head of each

[[Page 126]]

container before removal for export, for use on vessels or aircraft, or 
for transfer to a foreign-trade zone.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 
5062))

[T.D. ATF-82, 46 FR 21159, Apr. 9, 1981, as amended by T.D. ATF-299, 55 
FR 25034, June 19, 1990; T.D. ATF-372, 61 FR 20725, May 8, 1996]



Sec. 252.217  Consignment, shipment, and delivery.

    The consignment, shipment, and delivery of wines removed under this 
subpart shall be made under the provisions of subpart M of this part.

(72 Stat. 1336; 26 U.S.C. 5062)



Sec. 252.218  Disposition of Forms 1582-A.

    On removal of the wines from the premises, the exporter shall 
forward one copy of Form 1582-A to the regional director (compliance), 
retain one copy for his files, and deliver the original and remaining 
copy to the officer to whom the shipment is consigned, or in whose care 
it is shipped, as required by subpart M of this part. Where the shipment 
is for delivery for use on aircraft, the copy marked ``Consignee's 
Copy'', provided for in Sec. 252.214, shall be forwarded to the airline 
company at the airport.

(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1336; 19 
U.S.C. 1309, 81c, 26 U.S.C. 5062)



Sec. 252.219  Return of wine withdrawn for export with benefit of drawback.

    When notice is filed by an exporter as provided in Sec. 252.220, 
wine on which the tax has been paid or determined, and which was 
withdrawn especially for export with benefit of drawback as provided in 
Sec. 252.211, but which wine has not been laden for export, laden for 
use, or deposited in a foreign-trade zone, may for good cause be 
returned under the applicable provisions of this part and 27 CFR part 
24:
    (a) To a taxpaid storeroom at a bonded wine celler; or
    (b) To a wholesale liquor dealer.

The export marks on wines returned under this section shall be removed 
from the containers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062))

[T.D. ATF-198, 50 FR 8562, Mar. 1, 1985, as amended by T.D. ATF-344, 58 
FR 40355, July 28, 1993]



Sec. 252.220  Notice of return.

    If an exporter desires to return wine to a bonded wine cellar or 
wholesale liquor dealer as provided in Sec. 252.219, he shall file a 
notice, executed under the penalties of perjury, with the regional 
director (compliance) for the region in which the claim for drawback of 
tax was filed. The notice shall be prepared in triplicate for submission 
to the customs official as required in Sec. 252.220a. The notice shall 
show the:
    (a) Name, address, and registration number of the bonded wine cellar 
from which withdrawn;
    (b) Date and serial number of the Form 1582-A on which the wine was 
withdrawn;
    (c) Present location of the wine to be returned;
    (d) Number, size and identification of the containers;
    (e) Total wine gallons for each tax class of wine; and
    (f) Reason for the return.

(Approved by the Office of Management and Budget under control number 
1512-0292)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062))

[T.D. ATF-198, 50 FR 8562, Mar. 1, 1985; 50 FR 23410, June 4, 1985]



Sec. 252.220a  Responsibility for return of wine withdrawn for export with benefit of drawback.

    The exporter shall be responsible for arranging the return of wine 
under this subpart to the proprietor or wholesale liquor dealer 
receiving the wine. The exporter or his agent shall submit the original 
and copies of the notice required by Sec. 252.220 to the appropriate 
customs official. If the wine is returned before Form 1582-A has been 
filed with the customs official, the exporter shall submit ATF Form 
1582-A with the notice. The customs officer shall, if the wine is 
eligible for return under Sec. 252.219, accept the notice as authority

[[Page 127]]

for the return of the wine to the premises identified in the notice. The 
customs officer shall acknowledge receipt of the notice, retain a copy, 
and return the original and one copy of the notice to the exporter. The 
exporter shall retain the copy and file the original of the notice with 
the regional director (compliance) identified thereon.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062))

[T.D. ATF-198, 50 FR 8562, Mar. 1, 1985]



         Subpart L--Exportation of Beer With Benefit of Drawback



Sec. 252.221  General.

    Beer brewed or produced in the United States and on which the 
internal revenue tax has been paid may, subject to this part, be:
    (a) Exported;
    (b) Delivered for use as supplies on the vessels and aircraft 
described in Sec. 252.21; or
    (c) Transferred to and deposited in a foreign-trade zone for 
exportation or for storage pending exportation.

Claim for drawback of taxes found to have been paid may be filed only by 
the producing brewer or his duly authorized agent. On receipt by the 
regional director (compliance) of required evidence of such exportation, 
delivery for use, or transfer, there shall be allowed a drawback equal 
in amount to the tax found to have been paid on such beer.

(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335; 19 
U.S.C. 1309, 81c, 26 U.S.C. 5055)



Sec. 252.222  Claim, Form 1582-B.

    Claim for allowance of drawback of internal revenue taxes on beer 
brewed or produced in the United States shall be prepared on Form 1582-
B, in quadruplicate, as required by this part. Each Form 1582-B shall be 
given, by the person initiating the form, a serial number beginning with 
``1'' for the first day of January of each year and running 
consecutively thereafter to December 31, inclusive.

(72 Stat. 1335; 26 U.S.C. 5055)



Sec. 252.223  Export marks.

    In addition to the marks and brands required to be placed on kegs, 
barrels, cases, crates or other packages under the provisions of part 25 
of this chapter, the exporter shall mark the word ``Export'' on each 
container or case before removal for export, for use on vessels or 
aircraft, or for transfer to a foreign-trade zone.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 
5055))

[T.D. ATF-82, 46 FR 21159, Apr. 9, 1981, as amended by T.D. ATF-224, 51 
FR 7700, Mar. 5, 1986]

                           Execution of Claims



Sec. 252.225  Removals of beer by brewer.

    Where a brewer removes taxpaid beer from the brewery or from its 
place of storage elsewhere for exportation, for lading for use as 
supplies on vessels or aircraft, or for deposit in a foreign-trade zone, 
he shall execute the notice and claim on Form 1582-B. On removal of the 
beer for shipment the brewer shall file one copy of Form 1582-B with the 
regional director (compliance) of his region, retain one copy for his 
files, and immediately forward the original and one copy of the form:
    (a) In case of shipments for export or for use as supplies on 
vessels or aircraft, to the district director of customs at the port of 
export; or
    (b) In the case of shipments to the armed services of the United 
States for export, to the commanding or supply officer to whom the 
shipment is consigned; or
    (c) In the case of shipments to a foreign-trade zone, to the customs 
officer in charge of the zone.

(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335; 19 
U.S.C. 1309, 81c, 26 U.S.C. 5055)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 252.226  Removals of beer by agent on behalf of brewer.

    Where proper power of attorney authorizing an agent to execute a 
claim

[[Page 128]]

on behalf of the brewer has been filed with the regional director 
(compliance), such agent may, for any of the purposes authorized in 
Sec. 252.221, remove taxpaid beer from the brewery where produced or 
from its place of storage elsewhere, and execute the notice and claim on 
Form 1582-B on behalf of the brewer. On removal of the beer, such agent 
shall dispose of Form 1582-B in accordance with the applicable procedure 
set forth in Sec. 252.225.

(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335; 19 
U.S.C. 1309, 81c, 26 U.S.C. 5055)



Sec. 252.227  Removals of beer by persons other than the brewer or agent of the brewer.

    Where there is a removal of taxpaid beer by a person other than the 
brewer or the agent of the brewer for any of the purposes authorized in 
Sec. 252.221, such person shall execute the notice, only, on Form 1582-
B. Where the removal consists of the products of more than one brewer, 
separate Forms 1582-B shall be prepared for the products of each brewer. 
On removal of the beer for shipment such person shall forward two copies 
of Form 1582-B to the producing brewer, and immediately forward the 
original and one copy of the form as prescribed in Sec. 252.225(a), (b), 
or (c), as the case may be. On receipt of the two copies of Form 1582-B 
from the exporter, the brewer shall, if he wishes to claim drawback on 
the beer covered thereby, execute the claim for drawback on both copies 
of the form, file one copy of the claim with the regional director 
(compliance) of his region, and retain the remaining copy for his files.

(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335; 19 
U.S.C. 1309, 81c, 26 U.S.C. 5055)

                   Consignment, Shipment, and Delivery



Sec. 252.230  Consignment, shipment, and delivery.

    The consignment, shipment, and delivery of taxpaid beer removed 
under this subpart shall be made under the provisions of subpart M of 
this part.

(72 Stat. 1335; 26 U.S.C. 5055)



               Subpart M--Shipment or Delivery for Export

                               Consignment



Sec. 252.241  Shipment for export, or for use on vessels.

    All liquors and specially denatured spirits intended for export or 
liquors intended for use as supplies on vessels shall be consigned to 
the district director of customs at the port of exportation, or port of 
lading for supplies on vessels, except that when the shipment is for 
export to a contiguous foreign territory it shall be consigned to the 
foreign consignee at destination in care of the district director of 
customs at the port of export.

(72 Stat. 1334, 1335, 1336, 1362, 1380; 26 U.S.C. 5053, 5055, 5062, 
5214, 5362)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 252.242  Shipment for use on aircraft.

    (a) Distilled spirits and wine. All distilled spirits and wines 
intended for use on aircraft shall be consigned to the airline at the 
airport from which the aircraft will depart in international travel, in 
care of the district director of customs. On receipt of the distilled 
spirits or wines they shall be stored at the airport under customs 
custody until laden on aircraft.
    (b) Beer. Beer intended for use on aircraft shall be consigned to 
the district director of customs at the port of lading.

(48 Stat. 999, as amended, 72 Stat. 1362, 1380; 19 U.S.C. 1309, 26 
U.S.C. 5214, 5362)

[25 FR 5734, June 23, 1969, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 252.243  Shipment to armed services.

    On removal of distilled spirits, wines, or beer for export to the 
armed services of the United States, the shipment shall be consigned to 
the commanding officer or supply officer at the supply base or other 
place of delivery.

(72 Stat. 1334, 1335, 1336, 1362, 1380; 26 U.S.C. 5053, 5055, 5062, 
5214, 5362)

[[Page 129]]



Sec. 252.244  Shipment to manufacturing bonded warehouse.

    Distilled spirits and wines withdrawn for shipment to a 
manufacturing bonded warehouse shall be consigned to the proprietor of 
such warehouse in care of the customs officer in charge of the 
warehouse.

(72 Stat. 1362, 1380; 26 U.S.C. 5214, 5362)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71725, Dec. 11, 1979]



Sec. 252.244a  Shipment to a customs bonded warehouse.

    Distilled spirits and wine withdrawn for shipment to a customs 
bonded warehouse shall be consigned in care of the customs officer in 
charge of the warehouse.

(Sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066); 
sec. 2, Pub. L. 96-601, 94 Stat. 3495 (26 U.S.C. 5362))

[T.D. ATF-88, 46 FR 39816, Aug. 5, 1981]



Sec. 252.245  Shipment to foreign-trade zone.

    Where distilled spirits (including specially denatured spirits), 
wines, or beer, are transferred to a foreign-trade zone for exportation 
or for storage pending exportation, the shipment shall be consigned to 
the Zone Operator in care of the customs officer in charge of the zone.

(48 Stat. 999, as amended, 72 Stat. 1362, 1380; 19 U.S.C. 81c, 26 U.S.C. 
5214, 5362)



Sec. 252.246  Delivery for shipment.

    The proprietor or exporter may deliver the shipment directly to the 
consignees designated in Secs. 252.241 through 252.245, or he may 
deliver it to a carrier for transportation and delivery to such 
consignees, or, when the exportation is to a contiguous foreign country, 
to the foreign consignee.

(72 Stat. 1334, 1335, 1336, as amended, 1362, 1380; 26 U.S.C. 5053, 
5055, 5062, 5214, 5362)

[T.D. 7002, 34 FR 1599, Feb. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 252.247  Change in consignee.

    Where a change of consignee is desired after the liquors (including 
specially denatured spirits) have been removed from the shipping 
premises, the exporter shall notify the appropriate officer to whom the 
shipment is required by Secs. 252.241-252.245 to be consigned or in 
whose care it is required to be shipped, and forward a copy of such 
notification to the appropriate regional director (compliance). Such 
notice shall identify the withdrawal or claim form, as the case may be, 
covering the shipment.

(72 Stat. 1334, 1335, 1336, 1362, 1380; 26 U.S.C. 5053, 5055, 5062, 
5214, 5362)

                             Bills of Lading



Sec. 252.250  Bills of lading required.

    A copy of the export bill of lading covering transportation from the 
port of export to the foreign destination, or a copy of the through bill 
of lading to the foreign destination, if so shipped, covering the 
acceptance of the shipment by a carrier for such transportation, shall 
be obtained and filed by the claimant or exporter with the regional 
director (compliance) with whom the application, notice, or notice and 
claim is filed. Where the shipment consists of distilled spirits for 
deposit in a customs bonded warehouse, or distilled spirits or wines, 
for deposit in a foreign-trade zone, with benefit of drawback, and the 
principal has filed bond, Form 2738, a copy of the transportation bill 
of lading covering the shipment shall be obtained and filed by the 
claimant or exporter with the regional director (compliance) with whom 
the notice and claim is filed: Provided, That such transportation bill 
of lading will not be required when delivery is made directly to the 
foreign-trade zone or the customs bonded warehouse by the shipper. Bills 
of lading shall be signed by the carrier or by an agent of the carrier 
and shall contain the following minimum information:
    (a) As to spirits specially denatured spirits, and wines:
    (1) The name of the exporter (if different from the shipper),
    (2) The name and address of the consignee (foreign consignee in case 
of export or through bill of lading),
    (3) The number of packages or cases,
    (4) The serial number of the ATF Form 5100.11, 5110.30, or 1582-A, 
as the case may be, and

[[Page 130]]

    (5) The total quantity in wine gallons or liters,
    (b) As to beer:
    (1) The name of the shipper,
    (2) The name and address of the consignee (foreign consignee in case 
of export or through bill of lading), and
    (3) The number and size of containers.

Where a copy of an export bill of lading or a copy of the through bill 
of lading is required and is not obtainable, a certificate given by an 
agent of such carrier, as prescribed in Sec. 252.253, may be procured 
and transmitted by the claimant or exporter to the regional director 
(compliance) with whom the application, notice, or notice and claim is 
filed.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, 1335, 1336, as amended, 1362, 
1380, (26 U.S.C. 5053, 5055, 5062, 5214, 5362); sec. 3(a), Pub. L. 91-
659, 84 Stat. 1965 (26 U.S.C. 5066))

[T.D. 7002, 34 FR 1599, Feb. 1, 1969, as amended by 36 FR 8583, May 8, 
1971. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 252.250, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 252.251  Railway express receipts.

    Where the exportation is to a contiguous foreign country and the 
shipment is by railway express, a receipt issued by the railway express 
agency may be accepted in lieu of an export bill of lading if the 
receipt furnishes all of the information required in an export bill of 
lading.

(72 Stat. 1334, 1335, 1336, 1362, 1380; 26 U.S.C. 5053, 5055, 5062, 
5214, 5362)



Sec. 252.252  Air express or freight bills of lading.

    Where the exportation is made by air express or air freight, a bill 
of lading issued by the conveying airline is considered for the purpose 
of this part to be an export bill of lading if it otherwise conforms to 
the requirements of Sec. 252.250.

(72 Stat. 1334, 1335, 1336, 1362, 1380; 26 U.S.C. 5053, 5055, 5062, 
5214, 5362)



Sec. 252.253  Certificate by export carrier.

    A certificate, executed under the penalties of perjury, by an agent 
or representative of the export carrier, showing actual exportation of 
the liquors (including specially denatured spirits) may be furnished by 
an exporter as evidence of exportation. The certificate shall contain a 
description of the shipment, including the serial number of the 
withdrawal form, or the claim and entry form, as the case may be, the 
name of the exporter, the name of the consignee, the date received, the 
place where received by such carrier, and the name of the carrier from 
which received.

(72 Stat. 1334, 1335, 1336, 1362, 1380; 26 U.S.C. 5053, 5055, 5062, 
5214, 5362)



                Subpart N--Proceedings at Ports of Export



Sec. 252.261  Notice to district director of customs.

    On arrival at the port of exportation, of distilled spirits 
(including specially denatured spirits), wines, or beer, withdrawn or 
shipped for exportation or for use on vessels or aircraft, the exporter 
or his agent shall immediately notify the director of the port. At the 
same time, or prior thereto, the exporter or his agent shall file with 
the director two copies of the application, claim, or notice, ATF Form 
5100.11, 5110.30, 1582-A, 1582-B, or 1689, as the case may be, covering 
the shipment: Provided, That where the shipment is for direct 
exportation, such forms shall be filed at least six hours prior to 
lading.

(46 Stat. 690, as amended, 72 Stat. 1334, 1335, 1336, 1362, 1380; 19 
U.S.C. 1309, 26 U.S.C. 5053, 5055, 5062, 5214, 5362)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 252.261, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 252.262  Delay in lading at port.

    If, on arrival of a shipment withdrawn for export without payment of 
tax or free of tax, the exporting vessel is not prepared to receive the 
shipment, the district director of customs may permit such shipment to 
remain in possession of a carrier for a period

[[Page 131]]

not exceeding 30 days. Storage elsewhere for a like cause, and not 
exceeding the same period, may be approved by the district director of 
customs. In the event of further delay, the facts shall be reported to 
the regional director (compliance) of the region from which the shipment 
was made, who shall issue appropriate instructions concerning the 
disposition of the shipment.

(72 Stat. 1334, 1362, 1380; 26 U.S.C. 5053, 5214, 5362)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 252.263  [Reserved]



Sec. 252.264  Lading for exportation.

    On receipt of the notifcation required in Sec. 252.261, the district 
director of customs shall deliver both copies of the application, claim, 
or notice, ATF Form 5100.11, 5110.30, 1582-A, 1582-B, or 1689, as the 
case may be, covering the shipment, together with any forms which may be 
attached thereto, to a customs officer for inspection and supervision of 
lading. Such shipment shall be subject to the same requirements for 
inspection and supervision of lading at the port of exportation as may 
be required by Customs Regulations (19 CFR chapter I) in the case of 
similar shipments of imported merchandise to be exported in customs 
bond. When an inspection of the shipment is made before it is laden on 
board the exporting carrier and such inspection discloses any 
discrepancy, the customs officer shall make note of the nature and 
extent of the discrepancy on each copy of the application, claim, or 
notice, ATF Form 5110.11, 5110.30, 1582-A, 1582-B, or 1689, as the case 
may be, and where the discrepancy involves one or more packages of 
distilled spirits or wine, he shall prepare customs Form 6001 in 
accordance with the instructions in Sec. 252.291, and attach the 
original and copy of customs Form 6001 to the original and copy of the 
appropriate transaction form. The forms shall be disposed of according 
to the instructions thereon.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended, 
1336, as amended, 1362, as amended, 1380, as amended (26 U.S.C. 5053, 
5055, 5062, 5214, 5362))

[T.D. ATF-198, 50 FR 8562, Mar. 1, 1985]

    Editorial Note: For Federal Register citations affecting 
Sec. 252.264, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 252.265  Evidence of fraud.

    If the customs inspection discloses evidence of fraud, the customs 
officer shall detain the merchandise and notify the district director of 
customs who shall report the facts forthwith to the regional director 
(compliance) within whose region the port of export is located. The 
regional director (compliance) shall make investigation and take such 
action as the facts may warrant. Where the detained merchandise has been 
withdrawn for transfer and deposit in a manufacturing bonded warehouse, 
the merchandise shall be deemed not to have been deposited in said 
warehouse, and the designated officer shall hold in abeyance the 
processing of ATF Form 5100.11 until advised by the district director of 
customs that the detained merchandise may be entered for deposit. Where 
the detained merchandise has been withdrawn or entered for deposit in a 
foreign-trade zone or a customs bonded warehouse, it shall be deemed to 
not have been deposited in the zone or the warehouse and the customs 
officer shall hold in abeyance the processing of the application, 
notice, or claim, ATF Form 5100.11, 5110.30, 1582-A, 1582-B, or 1689, as 
the case may be, and Zone Form D, until advised by the district director 
of customs that the detained merchandise may be entered for deposit.

(48 Stat. 999, as amended, 72 Stat. 1334, 1335, 1336, 1362, 1380, 84 
Stat. 1965; 19 U.S.C. 81c, 26 U.S.C. 5053, 5055, 5062, 5214, 5362, 5066)

[T.D. 7112, 36 FR 8583, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71725, Dec. 11, 1979]

[[Page 132]]



Sec. 252.266  Release of detained merchandise.

    When any merchandise has been detained under the provisions of 
Sec. 252.265, the district director of customs shall not release such 
merchandise until he is advised so to do by the regional director 
(compliance).

(72 Stat. 1334, 1335, 1336, 1362, 1380; 26 U.S.C. 5053, 5055, 5062, 
5214, 5362)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 252.267  Exportation from interior port.

    Where a shipment made under this part is to be exported to a 
contiguous foreign country through a frontier port, and it is desired to 
avoid the delay of customs inspection at such port, the shipment may, 
subject to approval of the district director of customs, be entered for 
exportation at an interior customs port. Subject to such approval, the 
inspection and supervision of lading, and the affixing of customs seals, 
shall be done by a customs officer in accordance with the provisions of 
U.S. Customs regulations (19 CFR chapter I). On completion of the 
lading, the seals shall be affixed and the customs officer shall execute 
the certificate of lading on both copies of the application, notice, or 
claim, ATF Form 5100.11, 5110.30, 1582-A, 1582-B or 1689, as the case 
may be, and forward them, with attachments (if any), to the district 
director of customs at the interior port of entry. The district director 
of customs shall forward both copies of the form, with attachments (if 
any), to the customs officer at the frontier port. When the customs 
officer at the frontier port is satisfied that the shipment as described 
on the appropriate form has been exported, he shall execute his 
certificate on both copies of the form and return them with attachments 
(if any), to the district director of customs at the interior port of 
entry.

[T.D. ATF-198, 50 FR 8563, Mar. 1, 1985]



Sec. 252.268  Receipt for liquors for use on vessels or aircraft.

    Where liquors are withdrawn or removed for use on vessels or 
aircraft, the exporter shall procure and forward to the regional 
director (compliance) with whom the application, notice, or notice and 
claim is filed, a receipt executed under the penalties of perjury by the 
master or other authorized officer of the vessel, steamship company, or 
airline, as the case may be. The receipt shall give the number of 
containers, the serial numbers of the containers (if any), and the 
quantity received, and shall show that the liquors are in customs 
custody and have been or will be laden on board the vessel or aircraft, 
that they will be lawfully used on board the vessel or aircraft, and 
that no portion of the shipment has been or will be unladen in the 
United States or any of its territories or possessions. A receipt is not 
required, in the case of any shipment for use on vessels, when the 
liquors are laden on vessels of war, or, in cases other than supplies 
for vessels employed in the fisheries, where the amount of the tax on 
the liquors does not exceed $200. In the case of supplies for vessels 
employed in the fisheries, compliance with the provisions of Sec. 252.22 
is also required.

(46 Stat. 690, as amended, 72 Stat. 1334, 1335, 1336, as amended, 1362, 
1380; 19 U.S.C. 1309, 26 U.S.C. 5053, 5055, 5062, 5214, 5362)

[T.D. 7002, 34 FR 1600, Feb. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 252.269  Certification by district director of customs.

    (a) Exportation. When the district director of customs is satisfied 
that merchandise described on the application, notice, or claim, ATF 
Form 5100.11, 5110.30, 1582-A, 1582-B, or 1689, as the case may be, has 
been laden and cleared for export, he shall execute his certificate of 
lading and clearance on both copies of the form.
    (b) Distilled spirits and wines as supplies on vessels and aircraft. 
When the district director of customs is satisfied that the distilled 
spirits and wines described on ATF Form 5100.11, 5110.30, or 1582-A, as 
the case may be, have been duly laden for use on vessels and aircraft, 
and that proper accounting for such spirits or wines has been submitted 
to him as required by this part, he shall execute his certificate of 
lading for use on both copies of the form.

[[Page 133]]

    (c) Disposition of forms. After executing his certificate, the 
district director of customs shall forward the original of ATF Form 
5100.11, 5110.30, 1582-A, 1582-B, or 1689, as the case may be, with 
attachments (if any), to the regional director (compliance) designated 
on the form, and retain the remaining copy, with any attached forms, for 
his files.

(46 Stat. 690, as amended, 72 Stat. 1334, 1335, 1336, 1362, 1380; 19 
U.S.C. 1309, 26 U.S.C. 5053, 5055, 5062, 5214, 5362)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 252.269, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

                        Receipt by Armed Services



Sec. 252.275  Receipt by armed services.

    When liquors which have been withdrawn or removed for export to the 
armed services of the United States are received at the supply base or 
other designated place of delivery, the officer to whom consigned, or 
other authorized supply officer, at the supply base or other place of 
delivery shall enter the quantity of liquors received on both copies of 
the application, notice, or claim, ATF Form 5100.11, 5110.30, 1582-A, 
1582-B, or 1689, as the case may be. After signing the form, he shall 
forward the original with attachments, if any, to the regional director 
(compliance) designated on the form, and retain the other copy for his 
records.

(72 Stat. 1334, 1335, 1336, 1362, 1380; 26 U.S.C. 5053, 5055, 5062, 
5214, 5362)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71726, Dec. 11, 1979]

                       Lading for Use on Aircraft



Sec. 252.280  Distilled spirits and wines.

    When an airline desires to withdraw distilled spirits or wines from 
its stock being held at the airport under customs custody, for use on a 
particular aircraft, a requisition in triplicate shall be prepared for 
presentation to the customs officer. The requisition shall show the 
flight number, the registry number of the aircraft on which the 
distilled spirits or wines are to be laden, the country for which the 
aircraft is to be cleared, the date of departure of the aircraft, and 
the brand, kind, and quantity of distilled spirits or wines. Where the 
distilled spirits or wines are contained in kits which have been 
previously prepared while under customs custody, the kit number shall 
also be shown on the requisition. Where the kits are not prepared and 
the distilled spirits or wines are withdrawn for direct lading on 
aircraft, the requisition shall be serially numbered in lieu of the 
insertion of the kit number. When the distilled spirits or wines are 
withdrawn and laden aboard the aircraft, the lading shall be verified by 
the customs officer by an appropriate stamp or notation on the 
requisition. One copy of the requisition shall be retained by the 
customs officer who certifies to the lading for attachment to the 
outgoing manifest. The other two copies shall be delivered to the 
airline which shall retain both copies until the return of the flight. 
In case any of the distilled spirits or wines are removed from the 
aircraft on its return, they shall be returned to customs custody, 
appropriate notation made on both copies of the requisition retained by 
the airline and one copy shall be delivered to the customs officer for 
attachment to the incoming manifest. The remaining copy shall be 
retained by the airline.

(Approved by the Office of Management and Budget under control number 
1512-0384)

(46 Stat. 690, as amended, 72 Stat. 1336, 1362, 1380; 19 U.S.C. 1309, 26 
U.S.C. 5062, 5214, 5362)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984]



Sec. 252.281  Certificate of use for distilled spirits and wines.

    When all of the distilled spirits or wines represented by a single 
application, notice, or claim, ATF Form 5100.11, 5110.30, or 1582-A, as 
the case may be, have been withdrawn from customs custody and laden and 
used on aircraft, the airline shall prepare a certificate of use on 
which are itemized all the requisitions pertaining to such distilled 
spirits or wines. The certificate shall be executed under the penalties 
of perjury by an officer of the

[[Page 134]]

airline and shall show the name of the exporter, the entry number, the 
brand and kind of distilled spirits or wines, and the number of bottles 
to be accounted for; and, as to each requisition, the requisition (or 
kit) number, the date laden, the registry number of the aircraft, the 
country for which the aircraft was cleared, and the number of bottles 
used. When completed, the certificate shall be presented to the customs 
officer at the airport who shall then execute his certificate on both 
copies of the appropriate application, notice, or claim, ATF Form 
5100.11, 5110.30, or 1582-A, as the case may be, noting thereon any 
exception, such as shortages or breakage. The customs officer shall then 
attach the certificate of use to the copy of the appropriate form and 
forward both copies of the form to the district director of customs.

(46 Stat. 690, as amended, 72 Stat. 1336, 1362, 1380; 19 U.S.C. 1309, 26 
U.S.C. 5062, 5214, 5362)

[25 FR 5734, June 23, 1960, as amended by T.D. 7006, 34 FR 2251, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 252.281, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 252.282  Beer.

    When beer has been laden on board the aircraft for use as supplies, 
the customs officer shall execute his certificate on both copies of the 
Form 1582-B or Form 1689, as the case may be, forward the original to 
the regional director (compliance) designated on the form, and retain 
the copy for his files.

(46 Stat. 690, as amended, 72 Stat. 1334, 1335; 19 U.S.C. 1309, 26 
U.S.C. 5053, 5055)

                Receipt in Manufacturing Bonded Warehouse



Sec. 252.285  Receipt in manufacturing bonded warehouse.

    On receipt of the distilled spirits or wines, the related ATF Form 
5100.11 (with any attachments), such inspection as is necessary will be 
made to establish that the shipment corresponds with its description on 
ATF Form 5100.11 (and any attachments) and customs Form 6001 will be 
prepared according to Sec. 252.291. Any discrepancy disclosed by the 
inspection and gauge will be noted on each copy of ATF Form 5100.11. 
When the shipment corresponds with the description of ATF Form 5100.11 
(and any attachments), the certificate of deposit will be executed on 
both copies of ATF Form 5100.11 and the original of ATF Form 5100.11 
(and any attachments) and the original of his customs Form 6001 will be 
forwarded to the regional director (compliance). The remaining copies 
shall be kept on file.

(Sec. 201. Pub. L. 85-859, 72 Stat. 1362, as amended, 1380, as amended 
(26 U.S.C. 5214, 5362))

[T.D. ATF-198, 50 FR 8563, Mar. 1, 1985]

                   Receipt in Customs Bonded Warehouse



Sec. 252.286  Receipt in customs bonded warehouse.

    On receipt of the distilled spirits or wine and the related ATF Form 
5100.11 or 5110.30 as the case may be, the customs officer in charge of 
the customs bonded warehouse shall make such inspection as is necessary 
to establish to his satisfaction that the shipment corresponds with the 
description thereof on the appropriate form. The customs officer shall 
note on each copy of the Form 5100.11 or 5110.30, as the case may be, 
any deficiency in quantity or discrepancy between the merchandise 
inspected and that described on the form. Where the inspection discloses 
no loss, or where a loss is disclosed and there is no evidence to 
indicate fraud, the officer shall execute his certificate of deposit on 
both copies of the form, forward the original to the regional regulatory 
administrator, and retain the remaining copy for his files.

(Sec. 3(a), Pub. L. 91-659, 84 Stat. 1965 (26 U.S.C. 5066); sec. 2, Pub. 
L. 96-601, 94 Stat. 3495 (26 U.S.C. 5362))

[T.D. ATF-88, 46 FR 39816, Aug. 5, 1981]

                      Receipt in Foreign-Trade Zone



Sec. 252.290  Receipt in foreign trade zone.

    On receipt at the zone, the shipment shall be inspected by the 
customs officer in charge of the zone who shall determine if the 
shipment agrees with

[[Page 135]]

the description thereof on the application, notice, or claim, ATF Form 
5100.11, 5110.30, 1582-A, 1582-B, or 1689, as the case may be. If the 
customs officer regauges spirits or wine in the course of his 
inspection, he shall prepare customs Form 6001 according to 
Sec. 252.291. The customs officer shall note on both copies of the ATF 
Form 5100.11, 5110.30, 1582-A, 1582-B, or 1689, as the case may be any 
deficiency in quantity or discrepancy between the merchandise inspected 
or gauged and that described in the form. Where the inspection or gauge 
discloses no loss, or where a loss is disclosed by such inspection or 
gauge and there is no evidence to indicate fraud, the officer shall 
execute his certificate on both copies of the form covering the deposit, 
and forward to the regional director (compliance):
    (a) Original of the deposit from (with any attachments); and
    (b) Original of the officer's customs Form 6001, if any. The 
remaining copy of the deposit form (with any attachments), and the copy 
of any customs Form 6001, shall be retained by the customs officer for 
his files.

(48 Stat. 999, as amended (19 U.S.C. 81c); Sec. 201, Pub. L. 85-859, 72 
Stat. 1336, as amended, 1362, as amended, 1380, as amended (26 U.S.C. 
5062, 5214, 5362))

[T.D. ATF-198, 50 FR 8563, Mar. 1, 1985]

                              Customs Gauge



Sec. 252.291  Customs Form 6001.

    When spirits or wines are gauged as required in Secs. 252.264, 
252.285, or 252.290, the customs officer shall prepare in duplicate 
customs Form 6001 to show:
    (a) Date;
    (b) Name of exporter;
    (c) Serial number and designation of the related transaction form;
    (d) Kind of liquor (show whether alcohol, whiskey, brandy, rum, gin, 
vodka, wine, etc.);
    (e) Name and registry number of producer;
    (f) If gauged under Sec. 252.264, the location of the port;
    (g) If gauged under Sec. 252.285, the location and number of the 
manufacturing bonded warehouse;
    (h) If gauged under 252.290, the location and number of the foreign-
trade zone;
    (i) Kind and serial numbers or lot identification numbers of 
containers; and
    (j) For each container:
    (1) Proof of spirits, or percent of alcohol by volume in wine;
    (2) Proof gallons, if spirits;
    (3) Wine gallons, if wine; and
    (4) Variation from the last gauge (proof, percent of alcohol by 
volume or wine gallons).

[T.D. ATF-198, 50 FR 8563, Mar. 1, 1985]

                          Alternate Procedures



Sec. 252.295  Exception for export of beer.

    The provisions of this subpart do not apply in the case of beer when 
the exporter or claimant obtains proof of exportation other than 
certification by the military or customs certification of lading and use 
under Sec. 252.43. Brewers and exporters shall prepare Forms 1582-B or 
1689, as applicable, to cover exportation of beer, but customs or 
military certification on them is not required when other proof of 
exportation is used.

[LT.D.ATF-224, 51 FR 7700, Mar. 5, 1986]



                            Subpart O--Losses

                            Distilled Spirits



Sec. 252.301  Loss of distilled spirits in transit.

    The tax on distilled spirits withdrawn without payment of tax under 
this part and which are lost during transportation from the bonded 
premises of the distilled spirits plant from which withdrawn to (a) the 
port of export, (b) the manufacturing bonded warehouse, (c) the vessel 
or aircraft, (d) the foreign-trade zone, or (e) the customs bonded 
warehouse, as the case may be, may be remitted if evidence satisfactory 
to the regional director (compliance) establishes that such distilled 
spirits have not been unlawfully diverted, or lost by theft with 
connivance, collusion, fraud, or negligence on the part of the exporter, 
owner, consignor, consignee, bailee, or carrier or the employees or 
agents of any of

[[Page 136]]

them: Provided, That such remission in the case of loss of distilled 
spirits by theft shall only be allowed to the extent that the claimant 
is not indemnified against or recompensed in respect of the tax for such 
loss.

(72 Stat. 1323, as amended, 84 Stat. 1965; 26 U.S.C. 5008, 5066)

[T.D. 7112, 36 FR 8583, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 252.302  Notice to exporter.

    If, on examination of the ATF Form 5100.11 (and attached gauge 
reports, if any) received from the officer required to certify the same 
under the provisions of subpart N of this part, the regional director 
(compliance) is of the opinion that the distilled spirits reported lost 
had been unlawfully diverted, or had been lost by theft, he will advise 
the exporter by letter:
    (a) Of the identity of the containers;
    (b) Of the amount of the loss;
    (c) Of the circumstances indicating diversion or theft;
    (d) That allowance of the loss will be subject to filing (1) proof 
that such loss is allowable under the provisions of 26 U.S.C. 5008 (a) 
and (f), and (2) claim for remission of the tax on the spirits so lost; 
and
    (e) That action in respect of the loss will be withheld for a period 
of not more than 30 days to afford an opportunity to file such proof and 
claim.

In any case in which distilled spirits are lost during transportation, 
as described in Sec. 252.301, whether by theft or otherwise, the 
regional director (compliance) may require the exporter to file a claim 
for relief in accordance with Sec. 252.303. When circumstances may 
warrant, extensions of additional time for submission of the proof and 
claim may be granted by the regional director (compliance). Where such 
proof and claim are not filed within the 30-day period, or such 
extensions as the regional director (compliance) may grant, the tax on 
the distilled spirits diverted or lost will be assessed, or liability 
asserted against the bond covering the shipment, as the case may be.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979; T.D. ATF-62, 44 
FR 71726, Dec. 11, 1979]



Sec. 252.303  Filing of claims.

    Claims, for remission of tax on the distilled spirits under 
Sec. 252.301, shall be filed on Form 2635, in duplicate, with the 
regional director (compliance), and shall set forth the following:
    (a) Name, address, and capacity of the claimant;
    (b) Identification (including serial numbers, if any) and location 
of the container or containers from which the spirits were lost;
    (c) Quantity of spirits lost from each container, and the total 
quantity of spirits covered by the claim;
    (d) Total amount of tax for which the claim is filed;
    (e) The date, penal sum, and form number of the bond under which 
withdrawal and shipment were made;
    (f) Name, number, and address of the distilled spirits plant from 
which withdrawn without payment of tax;
    (g) Date of the loss (or, if not known, date of discovery), the 
cause thereof, and all the facts relative thereto;
    (h) Name of the carrier;
    (i) If lost by theft, facts establishing that the loss did not occur 
as the result of any connivance, collusion, fraud, or negligence on the 
part of the exporter, owner, consignor, consignee, bailee, or carrier, 
or the employees or agents of any of them;
    (j) In the case of a loss by theft, whether the claimant is 
indemnified or recompensed in respect of the tax on the spirits lost, 
and, if so, the amount and nature of such indemnity or recompense and 
the actual value of the spirits, less the tax.

The claim shall be executed by the exporter or his authorized agent 
under the penalties of perjury, and shall be supported (whenever 
possible) by affidavits of persons having personal

[[Page 137]]

knowledge of the loss. The regional director (compliance) may require 
such further evidence as he deems necessary.

(68A Stat. 749, 72 Stat. 1323; 26 U.S.C. 6065, 5008)



Sec. 252.304  Action on claim.

    The regional director (compliance) will allow or disallow claims 
filed under Sec. 252.303 in accordance with existing law and 
regulations. If the regional director (compliance) finds that there has 
been a diversion or theft of the distilled spirits as the result of any 
connivance, collusion, fraud, or negligence on the part of the exporter, 
owner, consignor, consignee, bailee, or carrier, or the employees or 
agents of any of them, the tax on the distilled spirits diverted or lost 
by theft will be assessed, or liability asserted against the bond 
covering the shipment, as the case may be.

(68A Stat. 867, 72 Stat. 1323; 26 U.S.C. 7302, 5008)

                       Specially Denatured Spirits



Sec. 252.310  Loss of specially denatured spirits in transit.

    Losses of specially denatured spirits withdrawn free of tax under 
this part during transportation from the bonded premises of the 
distilled spirits plant from which withdrawn to (a) the port of export, 
or (b) the foreign-trade zone, as the case may be, may be allowed if 
evidence satisfactory to the regional director (compliance) establishes 
that such specially denatured spirits have not been unlawfully diverted, 
or lost by theft as the result of any connivance, collusion, fraud, or 
negligence on the part of the exporter, owner, consignor, consignee, 
bailee, or carrier, or the employees or agents of any of them. The 
giving of notice to the exporter, filing claims for allowance of loss, 
and action on the claims shall be, insofar as applicable, in accordance 
with the procedure prescribed in Secs. 252.302 through 252.304.

                                  Wine



Sec. 252.315  Loss of wine in transit.

    The tax on wine withdrawn without payment of tax under this part and 
which is lost during transportation from the bonded wine cellar from 
which withdrawn to (a) the port of export, (b) the vessel or aircraft, 
(c) the foreign-trade zone, (d) the manufacturing bonded warehouse, or 
(e) the customs bonded warehouse, as the case may be, may be remitted if 
evidence satisfactory to the regional director (compliance) establishes 
that such wine has not been unlawfully diverted, or lost by theft with 
connivance, collusion, fraud, or negligence on the part of the exporter, 
owner, consignor, consignee, bailee, or carrier or the employees or 
agents of any of them. However, the remission of tax on wine withdrawn 
without payment of tax under this part and which is lost while in 
transit may be allowed only to the extent that the claimant is not 
indemnified or recompensed for such tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, 1382 (26 U.S.C. 5370, 5371))

[T.D. ATF-88, 46 FR 39816, Aug. 5, 1981]



Sec. 252.316  Notice to exporter.

    If, on examination of the ATF Form 5100.11 received from the officer 
required to certify the same under the provisions of subpart N, the 
regional director (compliance) is of the opinion that wine reported lost 
had been unlawfully diverted, or had been lost by theft, he will advise 
the exporter by letter:
    (a) Of the identity of the containers;
    (b) Of the amount of the loss;
    (c) Of the circumstances indicating diversion or theft;
    (d) That allowance of the loss will be subject to filing (1) proof 
that such loss is allowable under the provisions of 26 U.S.C. 5370, and 
(2) claim for remission of the tax on the wine so lost; and
    (e) That action in respect of the loss will be withheld for a period 
of not more than 30 days to afford an opportunity to file such proof and 
claim.

In any case in which wines are lost during transportation, as described 
in Sec. 252.315, whether by theft or otherwise, the regional director 
(compliance) may require the exporter to file a claim for relief in 
accordance with Sec. 252.317. Where circumstances may warrant, 
extensions of additional time for submission of the proof and claim may 
be

[[Page 138]]

granted by the regional director (compliance). Where such proof and 
claim are not filed within the 30-day period, or such extensions as the 
regional director (compliance) may grant, the tax on the wine diverted 
or lost will be assessed, or liability asserted against the bond 
covering the shipment, as the case may be.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5370))

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979; T.D. ATF-62, 44 
FR 71726, Dec. 11, 1979]



Sec. 252.317  Filing of claims.

    Claims, for remission of tax on the wine under Sec. 252.315, shall 
be filed on Form 2635, in duplicate, with the regional director 
(compliance), and shall set forth the following:
    (a) The name, address, and capacity of the claimant;
    (b) The name, registry number, and location of the bonded wine 
cellar from which the wine was withdrawn;
    (c) The date, penal sum, and form number of the bond under which 
withdrawal and shipment was made;
    (d) Identification (including serial numbers, if any) and location 
of the container or containers from which the wine was lost;
    (e) The quantity of wine lost from each container, and the total 
quantity of wine covered by the claim;
    (f) The total amount of tax for which the claim is filed;
    (g) The date of the loss (or, if not known, date of discovery), the 
cause thereof, and all the facts relative thereto;
    (h) Name of the carrier;
    (i) If lost by theft, the facts establishing that the loss did not 
occur as the result of any connivance, collusion, fraud, or negligence 
on the part of the exporter, owner, consignor, consignee, bailee, or 
carrier, or the agents or employees of any of them; and
    (j) Whether the claimant is indemnified or recompensed in respect of 
the tax on the wine lost, and, if so, the amount and nature of such 
indemnity or recompense and the actual value of the wine, less the tax.

The claim shall be signed by the exporter or his authorized agent under 
the penalties of perjury, and shall be supported (whenever possible) by 
affidavits of persons having personal knowledge of the loss. The 
regional director (compliance) may require such further evidence as he 
deems necessary.

(68A Stat. 749, 72 Stat. 1381, 1382; 26 U.S.C. 6065, 5370, 5371)



Sec. 252.318  Action on claim.

    Action on claims filed under Sec. 252.317 shall be, insofar as 
applicable, in accordance with the procedure prescribed in Sec. 252.304.

(72 Stat. 1381; 26 U.S.C. 5370)

                        Beer And Beer Concentrate



Sec. 252.320  Loss of beer and beer concentrate in transit.

    (a) Losses not requiring inspection. When, on receipt by the 
regional director (compliance) of Form 1689 from the officer required to 
certify it under the provisions of subpart N of this part, it is 
disclosed that there has been a loss of beer or beer concentrate after 
removal from the brewery without payment of tax while in transit to the 
port of export, the vessel or aircraft, or the foreign-trade zone, and 
the report of the certifying officer shows that the loss was a normal 
one caused by casualty, leakage, or spillage, the regional director 
(compliance) will allow the loss.
    (b) Losses requiring inspection. When it is disclosed that the loss 
of beer or beer concentrate is large or unusual, the regional director 
(compliance) will conduct an investigation of the loss. When it is 
disclosed that the loss in transit has occurred by reason of casualty, 
leakage or spillage, credit for the loss will be allowed. When the 
investigation discloses evidence indicating that the loss resulted from 
theft or from fraud, the regional director (compliance) will afford the 
brewer opportunity to submit a written explanation with respect to the 
causes of the loss before taking further action.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended, 
1335, as amended (26 U.S.C. 5051, 5053, 5056))

[T.D. ATF-224, 51 FR 7700, Mar. 5, 1986]

[[Page 139]]



Sec. 252.321  Tax assessed on loss not accounted for.

    The regional director (compliance) shall make demand on the brewer 
for an amount equal to the tax which would be due on removal for 
consumption or sale, including penalties and interest, on; (a) The 
quantity of beer not satisfactorily accounted for, or (b) the quantity 
of beer used to produce the quantity of beer concentrate which is not 
satisfactorily accounted for.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended 
(26 U.S.C. 5051, 5053))

[T.D. ATF-224, 51 FR 7700, Mar. 5, 1986]



                       Subpart P--Action on Claims



Sec. 252.331  Claims supported by bond, Form 2738.

    On receipt of a claim for drawback of tax on distilled spirits or 
wines on which the tax has been determined, and of the evidence of 
exportation required by Sec. 252.40, or of lading for use on vessels or 
aircraft required by Sec. 252.41, or of deposit in a foreign-trade zone 
or of deposit of distilled spirits in a customs bonded warehouse, as 
required by Sec. 252.42, as the case may be, the regional director 
(compliance) shall, if a good and sufficient bond has been filed as 
provided in Sec. 252.65, and the notice of removal has been properly 
completed, allow the claim in accordance with the rate of drawback 
established in respect of the particular spirits or wines on which claim 
is based and charge the amount allowed against the bond. On receipt of 
the original of the claim properly executed by the appropriate customs 
official or armed services officer, as required by this part, and, in 
the case of claims on Form 1582-A, the certificate of tax determination, 
Form 2605, the regional director (compliance) shall give appropriate 
credit to the bond.

(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1336, as 
amended, 84 Stat. 1965; 19 U.S.C. 1309, 81c, 26 U.S.C. 5062, 5066)

[T.D. 7112, 36 FR 8583, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 252.332  Claim against bond.

    When any claim supported by a bond has been allowed and changed 
against the bond under the provisions of Sec. 252.331, and the original 
of the claim properly executed by the appropriate customs official or 
armed services officer as required by this part is not received by the 
regional director (compliance) within three months of the date the claim 
was allowed, or where the distilled spirits or wines are not otherwise 
accounted for in accordance with this part, the regional director 
(compliance) shall advise the claimant of the facts, and notify him that 
unless the original of the claim, properly executed as required by this 
part, is received by the regional director (compliance) within 30 days, 
a written demand will be made upon the principal and the surety for 
repayment to the United States of the full amount of the drawback, plus 
interest at the rate prescribed by law from the time the drawback was 
paid. However, the regional director (compliance) may, if in his opinion 
the circumstances warrant it, grant the claimant any additional 
extension of time beyond 30 days as may be necessary to accomplish the 
required filing.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336 as amended, (26 U.S.C. 5062))

[T.D. ATF-70, 45 FR 33981, May 21, 1980]



Sec. 252.333  Where no bond is filed.

    Where a claim for drawback of tax on distilled spirits or wines on 
ATF Form 5110.30 or 1582-A, is not supported by a bond on Form 2738, and 
in all cases where claim for drawback of tax on beer is made on Form 
1582-B, the regional director (compliance) shall, on receipt by him of 
the original of the claim properly executed by the appropriate customs 
official or armed services officer, as required by this part, examine 
the claim to determine that it has been properly completed. He shall 
then, on receipt of the evidence of exportation required by Sec. 252.40, 
or of lading for use on vessels or aircraft required by Sec. 252.41, or 
of deposit in a foreign-trade zone or a customs bonded warehouse as 
required by Sec. 252.42, as the case may be, and, in the case of claims 
on Form 1582-A, the certificate of tax determination, Form 2605, allow 
the claim in the amount of the tax paid on the beer or the tax paid or 
determined

[[Page 140]]

on the distilled spirits or wines on which the claim is based and which 
were exported, laden as supplies on vessels or aircraft, or deposited in 
a foreign-trade zone or a customs bonded warehouse, as the case may be.

(46 Stat. 690, 691, as amended, 48 Stat. 999, as amended, 72 Stat. 1335, 
1336, 84 Stat. 1965; 19 U.S.C. 1309, 1311, 81c, 26 U.S.C. 5055, 5062, 
5066)

[T.D. 7112, 36 FR 8584, May 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71726, Dec. 11, 1979]



Sec. 252.334  Credit allowance.

    Where the claimant has indicated that he desires the amount of 
drawback allowed to be credited against internal revenue taxes 
determined by him but not yet paid, the regional director (compliance) 
shall prepare ATF Form 5620.2, in triplicate, and forward the original 
to the claimant. Where the credit relates to tax determined distilled 
spirits, procedure for taking the credit shall be in accordance with the 
procedures set forth in part 19 of this chapter. Where the credit 
relates to tax-determined wines, procedure for taking the credit shall 
be in accordance with the procedures set forth in part 240 of this 
chapter. No credit may be given for drawback of the tax on beer nor may 
one class of tax be credited to another.

(72 Stat. 1336; 26 U.S.C. 5062)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71726, Dec. 11, 1979]



Sec. 252.335  Disallowance of claim.

    If a claim for drawback of tax is not allowed in full, the regional 
director (compliance) shall notify the claimant in writing of the 
reasons for any disallowance.

(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335, 
1336; 19 U.S.C. 1309, 81c, 26 U.S.C. 5055, 5062)

[25 FR 5734, June 23, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-62, 44 FR 71726, Dec. 11, 1979]



PART 270--MANUFACTURE OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
270.1  Manufacture of tobacco products and cigarette papers and tubes.
270.2  Territorial extent.

                         Subpart B--Definitions

270.11  Meaning of terms.

                            Subpart C--Taxes

270.21  Cigar tax rates.
270.22  Determination of sale price of large cigars.
270.23  Cigarette tax rates.
270.24  Classification of cigarettes.
270.25  Smokeless tobacco tax rates.
270.25a  Pipe tobacco and roll-your-own tobacco tax rates.
270.26  Persons liable for tax.
270.27  Assessment.

                Subpart Ca--Special (Occupational) Taxes

270.31  Liability for special tax.
270.32  Rates of special tax.
270.33  Special tax returns.
270.34  Employer identification number.
270.35  Issuance, distribution, and examination of special tax stamps.
270.36  Changes in special tax stamps.

                  Subpart D--Administrative Provisions

270.41  Forms prescribed.
270.42  Authority of ATF officers to enter premises.
270.43  Interference with administration.
270.44  Disposal of forfeited, condemned, and abandoned tobacco 
          products.
270.45  Alternate methods or procedures.
270.46  Emergency variations from requirements.
270.47  Other businesses within factory.
270.48  Penalties and forfeitures.
270.49  Delegations of the Director.

         Subpart E--Qualification Requirements for Manufacturers

270.61  Qualification--General.
270.61a  Transitional rule.
270.62  Application for permit.
270.63  Corporate documents.
270.64  Articles of partnership or association.
270.65  Trade name certificate.
270.66  Bond.
270.67  Blanket bond.

[[Page 141]]

270.68  Power of attorney.
270.69  Factory premises.
270.70  Separation of and access to factory.
270.71  Factories established prior to October 1, 1961.
270.72  Use of factory premises.
270.73  Additional information.
270.74  Investigation of applicant.
270.75  Issuance of permit.
270.76  Retention of permit and supporting documents.

    Subpart F--Changes After Original Qualification of Manufacturers

                             Changes in Name

270.91  Change in individual name.
270.92  Change in trade name.
270.93  Change in corporate name.

                    Changes in Ownership and Control

270.101  Fiduciary successor.
270.102  Transfer of ownership.
270.103  Change in officers, directors, or stockholders of a 
          corporation.
270.104  Change in control of a corporation.

                     Changes in Location of Factory

270.111  Change in location within same region.
270.112  Change in address.
270.113  Change in location to another region.
270.114  Extension or curtailment of factory.

          Subpart G--Bonds and Extensions of Coverage of Bonds

270.131  Corporate surety.
270.132  Deposit of securities in lieu of corporate surety.
270.133  Amount of individual bond.
270.134  Amount of blanket bond.
270.135  Strengthening bond.
270.136  Superseding bond.
270.137  Extension of coverage of bond.
270.138  Approval of bond and extension of coverage of bond.
270.139  Termination of bond.
270.140  Release of pledged securities.

                 Subpart H--Operations by Manufacturers

         Determination and Payment of Taxes on Tobacco Products

270.161  Determination of tax and method of payment.
270.162  Semimonthly tax return.
270.163  Semimonthly tax return periods.
270.164  Special rule for taxes due for the month of September 
          (effective after December 31, 1994).
270.165  Times for filing semimonthly return.
270.165a  Payment of tax by electronic fund transfer.
270.166  Default, prepayment of tax required.
270.167  Prepayment tax return.
270.168  Remittance with return.
270.169  Employer identification number.
270.170  Application for employer identification number.
270.171  Execution and filing of Form SS-4.

                                 Records

270.181  General.
270.182  Record of tobacco.
270.183  Record of tobacco products.
270.184  Record of removals subject to tax.
270.185  Retention of records.
270.186  Record in support of transfers in bond.
270.187  Record of sales prices of large cigars.

                         Inventories and Reports

270.201  Inventories.
270.202  Reports.
270.203  Statistical classification of large cigars.

                                Packages

270.211  Package.
270.212  Mark.
270.213  Tobacco products labeled for export.
270.214  Notice for cigars.
270.215  Notice for cigarettes.
270.216  Notice for smokeless tobacco.
270.216a  Notice for pipe tobacco.
270.216b  Notice for roll-your-own tobacco.
270.216c  Package use-up rule.
270.217  Repackaging.

                Exemption From Taxes on Tobacco Products

270.231  Consumption by employees.
270.232  Experimental purposes.
270.233  Transfer in bond.
270.234  Removal for use of the United States.
270.235  Removal for export purposes.
270.236  Release from customs custody.

              Other Provisions Relating to Tobacco Products

270.251  Emergency storage.
270.252  Reduction of tobacco products to materials.
270.253  Destruction.
270.254  Receipt into factory.
270.255  Shortages and overages in inventory.

                   Subpart I--Claims by Manufacturers

                                 General

270.281  Abatement of assessment.
270.282  Allowance of tax.
270.283  Credit or refund of tax.
270.284  Remission of tax liability.
270.285  [Reserved]
270.286  Refund of overpayment.
270.287  Remission of tax liability on shortage.

[[Page 142]]

                   Tobacco Products Lost or Destroyed

270.301  Action by claimant.

               Tobacco Products Withdrawn From the Market

270.311  Action by claimant.
270.312  Action by regional director (compliance).
270.313  Disposition of tobacco products and schedule.

 Subpart J--Suspension and Discontinuance of Operations by Manufacturers

270.331  Discontinuance of operations.
270.332  Suspension and revocation of permit.

          Subpart K--MANUFACTURE OF CIGARETTE PAPERS AND TUBES

                                  Taxes

Sec.
270.351  Cigarette papers.
270.352  Cigarette tubes.
270.353  Persons liable for tax.
270.354  Determination of tax and method of payment.
270.355  Return of manufacturer.
270.356  Adjustments in the return of manufacturer.
270.357  Payment of tax by electronic fund transfer.
270.358  Assessment.
270.359  Employer identification number.
270.360  Application for employer identification number.
270.361  Execution and filing of Form SS-4.

                      Special (Occupational) Taxes

270.371  Liability for special tax.
270.372  Rate of special tax.
270.373  Special tax returns.
270.374  Issuance, distribution, and examination of special tax stamps.
270.375  Changes in special tax stamps.

                                 General

270.382  Authority of ATF officers to enter premises.
270.383  Interference with administration.
270.384  Disposal of forfeited, condemned, and abandoned cigarette 
          papers and tubes.
270.385  Alternate methods or procedures.
270.386  Emergency variations from requirements.
270.387  Penalties and forfeitures.

              Qualification Requirements for Manufacturers

                         Original Qualifications

270.391  Persons required to qualify.
270.392  Bond.
270.393  Power of attorney.
270.394  Notice of approval of bond.

                  Changes After Original Qualification

270.395  Change in name.
270.396  Change in proprietorship.
270.397  Change in location.

                Bonds and Extensions of Coverage of Bonds

270.401  Corporate surety.
270.402  Two or more corporate sureties.
270.403  Deposit of securities in lieu of corporate surety.
270.404  Amount of bond.
270.405  Strengthening bond.
270.406  Superseding bond.
270.407  Extension of coverage of bond.
270.408  Approval of bond and extension of coverage of bond.
270.409  Termination of liability of surety under bond.
270.410  Release of pledged securities.

                       Operations by Manufacturers

                                 Records

270.421  General.

                                 Reports

270.422  General.
270.423  Opening.
270.424  Monthly.
270.425  Special.
270.426  Closing.

                               Inventories

270.431  General.
270.432  Opening.
270.433  Special.
270.434  Closing.

                           Document Retention

270.435  General.

                                Packages

270.441  General.

                        Miscellaneous Operations

270.451  Transfer in bond.
270.452  Release from customs custody.
270.453  Use of the United States.
270.454  Removal for export purposes.

                  Permanent Discontinuance of Business

270.461  Discontinuance of operations.

                         Claims by Manufacturers

                                 General

270.471  Abatement.
270.472  Allowance.
270.473  Credit or refund.
270.474  Remission.

[[Page 143]]

                            Lost or Destroyed

270.475  Action by claimant.

                        Withdrawn From the Market

270.476  Action by claimant.
270.477  Action by regional director (compliance).
270.478  Disposition of cigarette papers and tubes and schedule.

    Authority: 26 U.S.C. 5142, 5143, 5146, 5701, 5703-5705, 5711-5713, 
5721-5723, 5731, 5741, 5751, 5753, 5761-5763, 6061, 6065, 6109, 6151, 
6301, 6302, 6311, 6313, 6402, 6404, 6423, 6676, 6806, 7011, 7212, 7325, 
7342, 7502, 7503, 7606, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

    Source: 26 FR 8174, Aug. 31, 1961, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975; 54 FR 48839, Nov. 27,1989.



                     Subpart A--Scope of Regulations



Sec. 270.1  Manufacture of tobacco products and cigarette papers and tubes.

    This part contains regulations relating to the manufacture of 
tobacco products and cigarette papers and tubes; the payment by 
manufacturers of tobacco products and cigarette papers and tubes of 
internal revenue taxes imposed by 26 U.S.C. chapter 52; and the 
qualification of and operations by manufacturers of tobacco products.

[T.D. ATF-384, 61 FR 54085, Oct. 17, 1996]



Sec. 270.2  Territorial extent.

    The provisions of the regulations in this part shall apply in the 
several States of the United States and the District of Columbia.



                         Subpart B--Definitions



Sec. 270.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, the 
following terms shall have the meanings given in this section, unless 
the context clearly indicates otherwise. Words in the plural form shall 
include the singular, and vice versa, and words indicating the masculine 
gender shall include the feminine. The terms ``includes'' and 
``including'' do not exclude things not listed which are in the same 
general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.15, Delegation Order--Delegation of Certain of the Director's 
Authorities in 27 CFR parts 270, 275, and 296.
    Associate Director (Compliance Operations). The Associate Director 
(Compliance Operations) in the Bureau of Alcohol, Tobacco and Firearms, 
who is responsible to, and functions under the direction and supervision 
of, the Director.
    ATF. The Bureau of Alcohol, Tobacco and Firearms.
    ATF officer. An officer of the Bureau of Alcohol, Tobacco and 
Firearms (ATF) authorized to perform any function relating to the 
administration or enforcement of this part.
    Bank. Any commercial bank.
    Banking day. Any day during which a bank is open to the public for 
carrying on substantially all its banking functions.
    CFR. The Code of Federal Regulations.
    Chewing tobacco. Any leaf tobacco that is not intended to be smoked.
    Cigar. Any roll of tobacco wrapped in leaf tobacco or in any 
substance containing tobacco (other than any roll of tobacco which is a 
cigarette within the meaning of paragraph (2) of the definition for 
cigarette).
    Cigarette. (1) Any roll of tobacco wrapped in paper or in any 
substance not containing tobacco, and
    (2) Any roll of tobacco wrapped in any substance containing tobacco 
which, because of its appearance, the type of tobacco used in the 
filler, or its packaging and labeling, is likely to be offered to, or 
purchased by, consumers as a cigarette described in paragraph (1) of 
this definition.
    Cigarette paper. Paper, or any other material except tobacco, 
prepared for use as a cigarette wrapper.
    Cigarette papers. Taxable books or sets of cigarette papers, i.e., 
books or sets of cigarette papers containing more than 25 papers each.
    Cigarette tube. Cigarette paper made into a hollow cylinder for use 
in making cigarettes.
    Commercial bank. A bank, whether or not a member of the Federal 
Reserve

[[Page 144]]

System, which has access to the Federal Reserve Communications System 
(FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a communications 
network that allows Federal Reserve System member banks to effect a 
transfer of funds for their customers (or other commercial banks) to the 
Treasury Account at the Federal Reserve Bank in New York.
    Determine. To establish enough information about taxable products at 
the time of removal to calculate the tax, specifically the quantity 
(pounds or number) and kind (for example, cigarettes, snuff, paper 
tubes). Where the tax rate depends on additional information (such as 
number of cigarette papers to a set before January 1, 2000 or sale price 
of large cigars), that information must also be established as part of 
tax determination.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, 
Department of the Treasury, Washington, DC.
    Director of the service center. The Director, Internal Revenue 
Service Center, in any of the Internal Revenue regions.
    District director. A district director of internal revenue.
    Electronic fund transfer or EFT. Any transfer of funds effected by a 
manufacturer's commercial bank, either directly or through a 
correspondent banking relationship, via the Federal Reserve 
Communications System (FRCS) or Fedwire to the Treasury Account at the 
Federal Reserve Bank of New York.
    Export warehouse. A bonded internal revenue warehouse for the 
storage of tobacco products and cigarette papers and tubes, upon which 
the internal revenue tax has not been paid for subsequent shipment to a 
foreign country, Puerto Rico, the Virgin Islands, or a possession of the 
United States, or for consumption beyond the jurisdiction of the 
internal revenue laws of the United States.
    Export warehouse proprietor. Any person who operates an export 
warehouse.
    Factory. The premises of a manufacturer of tobacco products as 
described in his permit issued under 26 U.S.C. chapter 52, or the 
premises of a manufacturer of cigarette papers and tubes on which such 
business is conducted.
    Fiscal year. The period which begins October 1 and ends on the 
following September 30.
    In bond. The status of tobacco products and cigarette papers and 
tubes, which come within the coverage of a bond securing the payment of 
internal revenue taxes imposed by 26 U.S.C. 5701 or 7652, and in respect 
to which such taxes have not been determined as provided by regulations 
in this chapter, including (a) such articles in a factory, (b) such 
articles removed, transferred, or released, pursuant to 26 U.S.C. 5704, 
and with respect to which relief from the tax liability has not 
occurred, and (c) such articles on which the tax has been determined, or 
with respect to which relief from the tax liability has occurred, which 
have been returned to the coverage of a bond.
    Large cigarettes. Cigarettes weighing more than three pounds per 
thousand.
    Large cigars. Cigars weighing more than three pounds per thousand.
    Manufacturer of cigarette papers and tubes. Any person who makes up 
cigarette paper into books or sets containing more than 25 papers each, 
or into tubes, except for personal use or consumption.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Package. The immediate container in which tobacco products or 
cigarette papers or tubes are put up in by the manufacturer and offered 
for sale or delivery to the consumer.
    Permit number. The combination of (1) the letters indicating the 
kind of permit, (2) the identifying number, and (3) the name or 
abbreviation of the State (or the District of Columbia) in which the 
factory is located, as assigned to the permit by the regional director 
(compliance); for example, ``TP-999-Utah''.
    Person. An individual, partnership, association, company, 
corporation, estate, or trust.

[[Page 145]]

    Pipe tobacco. Any tobacco which, because of its appearance, type, 
packaging, or labeling, is suitable for use and likely to be offered to, 
or purchased by, consumers as tobacco to be smoked in a pipe.
    Region. A Bureau of Alcohol, Tobacco and Firearms Region.
    Regional Director (compliance). The principal regional official 
responsible for administering regulations in this part.
    Removal or remove. The removal of tobacco products or cigarette 
papers or tubes from the factory or release from customs custody, 
including the smuggling of other unlawful importation of such articles 
into the United States.
    Roll-your-own tobacco. Any tobacco which, because of its appearance, 
type, packaging, or labeling, is suitable for use and likely to be 
offered to, or purchased by, consumers as tobacco for making cigarettes.
    Sale price. The price for which large cigars are sold by the 
manufacturer, determined in accordance with Sec. 270.22 and used for 
computation of the tax.
    Service center. An Internal Revenue Service Center in any of the 
Internal Revenue regions.
    Service center director. A director of an internal revenue service 
center.
    Sets. Any collection, grouping, or packaging of cigarette papers 
made up by any person for delivery to the consumer as a unit.
    Small cigarettes. Cigarettes weighing not more than three pounds per 
thousand.
    Small cigars. Cigars weighing not more than three pounds per 
thousand.
    Smokeless tobacco. Any snuff or chewing tobacco.
    Snuff. Any finely cut, ground, or powdered tobacco that is not 
intended to be smoked.
    This chapter. Title 27, Code of Federal Regulations, chapter I (27 
CFR chapter I).
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    Treasury Account. The Department of the Treasury's General Account 
at the Federal Reserve Bank of New York.
    U.S.C. The United States Code.

(26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as 
amended), (82 Stat. 959), and Sec. 38, Arms Export Control Act (90 Stat. 
744) Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6301); 
June 29, 1956, ch. 462, 70 Stat. 391 (26 U.S.C. 6301))

[T.D. ATF-48, 43 FR 13553, Mar. 31, 1978; 44 FR 55854, Sept. 28, 1979, 
as amended by T.D. ATF-77, 46 FR 3007, Jan. 13, 1981; T.D. ATF-232, 51 
FR 28080, Aug. 5, 1986; T.D. ATF-289, 54 FR 48839, Nov. 27, 1989; T.D. 
ATF-384, 61 FR 54085, Oct. 17, 1996; T.D. ATF-424, 64 FR 71930, Dec. 22, 
1999; T.D. ATF-420, 64 FR 71939, Dec. 22, 1999]



                            Subpart C--Taxes



Sec. 270.21  Cigar tax rates.

    (a) Cigars are taxed at the following rates under 26 U.S.C. 5701(a):

----------------------------------------------------------------------------------------------------------------
                                                         Tax rate for removals during the years:
            Type and amount            -------------------------------------------------------------------------
                                             1993 to  1999            2000 and  2001          2002 and  after
----------------------------------------------------------------------------------------------------------------
Small cigars per thousand.............  $1.125                   $1.594                   $1.828
Large cigars per thousand *
     percentage of sale price.  12.75%                   18.063%                  20.719%
     but not to exceed.
----------------------------------------------------------------------------------------------------------------
*For large cigars, the percentage tax rate applies when the sale price is $235.294 per thousand or less, and the
  flat tax rate applies when the sale price is more than $235.294 per thousand.

    (b) See Sec. 270.22 of this part for rules concerning determination 
of sale price of large cigars.
    (c) Cigars not exempt from tax under 26 U.S.C. chapter 52 and the 
provisions of this part which are removed but not intended for sale 
shall be taxed at the same rate as similar cigars removed for sale.

[ T.D. ATF-420, 64 FR 71939, Dec. 22, 1999]

[[Page 146]]



Sec. 270.22  Determination of sale price of large cigars.

    (a) General rule. The tax imposed on large cigars is computed based 
on the sale price (the price for which the large cigars are sold by the 
manufacturer). In addition to money, goods or services exchanged for 
cigars may be considered as part of the sale price.
    (b) Special cases.--(1) In general. If there is any question 
concerning the applicable sale price for tax purposes, the appropriate 
ATF officer will determine such price, applying rules similar to the 
constructive sale price rules in 26 U.S.C. 4216(b) and the implementing 
regulations in 26 CFR 48.4216(b)-1 through 48.4216(b)-4. These 
constructive sale price rules apply to cigars sold by a manufacturer at 
retail, sold on consignment, or sold (otherwise than through an arm's 
length transaction) at less than the fair market price. Sales of cigars 
between affiliated corporations may be analyzed under the constructive 
sale price rules. The appropriate ATF officer may make this analysis on 
his or her own initiative or upon the written request of a manufacturer. 
If ATF decides it is necessary, we will publish constructive sale price 
determinations in the ATF Bulletin in accordance with Sec. 70.701(d) of 
this chapter.
    (2) Adjustments in sale price.--(i) Reasons for adjustment. 
Adjustments to the sale price may occur as a result of a discount or 
price increase by the manufacturer or as a result of an ATF 
determination pursuant to paragraph (b)(1) above. In either case, the 
manufacturer must make conforming changes to the tax that was computed 
on the sale price before the adjustment.
    (ii) Time of adjustment. If an adjustment is made before the end of 
the same tax return period as the original determination of the tax, the 
adjustment may be made on the same return. If the price is increased or 
decreased retroactively (during a later return period), either by the 
manufacturer or by ATF's determination, the manufacturer must make an 
adjustment on the tax return for the current return period in which the 
price change was determined.
    (iii) Amount of adjustment. The taxpayer must compute the adjustment 
to the tax as the difference between the tax that was paid and the tax 
that should have been paid, based on the newly determined sale price, 
together with interest thereon and any applicable penalties. The 
interest must be computed from the time of payment of the original tax 
until the time the adjustment was made. Upon request, the appropriate 
ATF officer will provide information regarding interest rates applicable 
to specific time periods and any applicable penalties.
    (3) Pricing for different packaging. If different bona fide sale 
prices are applicable to different types of packaging (e. g., boxes of 
25 and boxes of 50), then the cigars in each type of packaging are taxed 
on the basis of their respective sale prices.
    (4) Pricing of seconds. If some of an otherwise identical cigar 
brand and size:
    (i) Are distinctive from other such cigars because of physical 
imperfections, (ii) Are offered to the consumer through clear labeling 
as ``imperfects'', ``seconds'', ``throw-outs'', or a comparable commonly 
understood term, and
    (iii) The manufacturer has a separate sale price for such cigars, 
then they are taxed on the basis of this separate sale price.
    (5) Combination packages. If a manufacturer has a sale price for a 
combination package containing cigars of different sizes, the cigars are 
taxed based on that combination sale price. If there is no sale price 
for the combination, then the cigars are taxed based on their individual 
sale prices.
    (6) Removals for another person. If a manufacturer makes taxable 
removals of a brand and size of cigar only for distribution by others 
who establish the sale price, the tax is based on such sale price even 
though the manufacturer who makes the removals does not establish the 
price.

[T.D. ATF-420, 64 FR 71939, Dec. 22, 1999]



Sec. 270.23  Cigarette tax rates.

    Cigarettes are taxed at the following rates under 26 U.S.C. 5701(b):

[[Page 147]]



------------------------------------------------------------------------
                                     Tax rate per thousand for removals
                                              during the years
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Small cigarettes.................          $12          $17       $19.50
Large cigarettes up to 6\1/2\"           25.20        35.70        40.95
 long............................
Large cigarettes over 6\1/2\"
 long............................      (2)Taxed at the rate for small
                                      cigarettes, counting each 2\3/4\
                                     inches or fraction thereof of the
                                      length of each as one cigarette.
------------------------------------------------------------------------


[T.D. ATF-420, 64 FR 71940, Dec. 22, 1999]



Sec. 270.24  Classification of cigarettes.

    For tax purposes, small cigarettes are designated Class A and large 
cigarettes are designated Class B.

(72 Stat. 1414; 26 U.S.C. 5701)



Sec. 270.25  Smokeless tobacco tax rates.

    Smokeless tobacco products are taxed at the following rates under 26 
U.S.C. 5701(e):

------------------------------------------------------------------------
                                     Tax rate per pound * for removals
                                              during the years
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Snuff............................        $0.36        $0.51       $0.585
Chewing tobacco..................         0.12         0.17        0.195
------------------------------------------------------------------------
* Prorate tax for fractions of a pound.


[T.D. ATF-420, 64 FR 71940, Dec. 22, 1999]



Sec. 270.25a  Pipe tobacco and roll-your-own tobacco tax rates.

    Pipe tobacco and roll-your-own tobacco are taxed at the following 
rates under 26 U.S.C. 5701(f) and (g), respectively:

------------------------------------------------------------------------
                                     Tax rate per pound * for removals
                                              during the years
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Pipe tobacco.....................       $0.675      $0.9567      $1.0969
Roll-your-own tobacco............     * No tax       0.9567       1.0969
------------------------------------------------------------------------
* Prorate tax for fractions of a pound.


[T.D. ATF-420, 64 FR 71940, Dec. 22, 1999]



Sec. 270.26  Persons liable for tax.

    The manufacturer of tobacco products shall be liable for the taxes 
imposed on tobacco products by 26 U.S.C. 5701: Provided, That when 
tobacco products are transferred in bond pursuant to 26 U.S.C. 5704, to 
the bonded premises of another such manufacturer or an export warehouse 
proprietor, the transferee shall become liable for the tax upon receipt 
by him of such products and the transferor shall thereupon be relieved 
of his liability for the tax. When tobacco products are released in bond 
from customs custody for transfer to the bonded premises of a 
manufacturer of tobacco products, the transferee shall become liable for 
the tax on such products upon release from customs custody. Any person 
who possesses tobacco products in violation of 26 U.S.C. 5751(a)(1) or 
(2), shall be liable

[[Page 148]]

for a tax equal to the tax on such products.

(Sec. 201, Pub. L. 85-859, 72 Stat 1415, as amended, 1424, as amended 
(26 U.S.C. 5703, 5751))

[T.D. 6871, 31 FR 32, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, Dec. 1, 
1986]



Sec. 270.27  Assessment.

    Whenever any person required by law to pay tax on tobacco products 
fails to pay such tax, the tax shall be ascertained and assessed against 
such person, subject to the limitations prescribed in 26 U.S.C. 6501. 
The tax so assessed shall be in addition to the penalties imposed by law 
for failure to pay such tax when required. Except in cases where delay 
may jeopardize collection of the tax, or where the amount is nominal or 
the result of an evident mathematical error, no such assessment shall be 
made until and after notice has been afforded such person to show cause 
against assessment. The person will be allowed 45 days from the date of 
such notice to show cause, in writing, against such assessment.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1415, as amended (26 U.S.C. 5703))

[T.D. 6871, 31 FR 32, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, Dec. 1, 
1986]



                Subpart Ca--Special (Occupational) Taxes

    Source: T.D. ATF-271, 53 FR 17560, May 17, 1988, unless otherwise 
noted.



Sec. 270.31  Liability for special tax.

    (a) Manufacturer of tobacco products. Every manufacturer of tobacco 
products shall pay a special (occupational) tax at a rate specified by 
Sec. 270.32 of the part. The tax shall be paid on or before the date of 
commencing the business of manufacturing tobacco products, and 
thereafter every year on or before July 1. On commencing business, the 
tax shall be computed from the first day of the month in which liability 
is incurred, through the following June 30. Thereafter, the tax shall be 
computed for the entire year (July 1 through June 30).
    (b) Transition rule. For purposes of paragraph (a) of this section, 
a proprietor engaged in the business of manufacturing tobacco products 
on January 1, 1988, shall be treated as having commenced business on 
that date. The special tax imposed by this transition rule shall cover 
the period January 1, 1988, through June 30, 1988, and shall be paid on 
or before April 1, 1988.
    (c) Each place of business taxable. A manufacturer of tobacco 
products incurs special tax liability at each place of business in which 
an occupation subject to special tax is conducted. A place of business 
means the entire office, plant or area of the business in any one 
location under the same proprietorship. Passageways, streets, highways, 
rail crossings, waterways, or partitions dividing the premises are not 
sufficient separation to require additional special tax, if the 
divisions of the premises are otherwise contiguous.

(26 U.S.C. 5143, 5731)



Sec. 270.32  Rates of special tax.

    (a) General. Title 26 U.S.C. 5731(a)(1) imposes a special tax of 
$1,000 per year on every manufacturer of tobacco products.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5731(b) 
provides for a reduced rate of $500 per year with respect to any 
manufacturer of tobacco products whose gross receipts (for the most 
recent taxable year ending before the first day of the taxable period to 
which the special tax imposed by Sec. 270.31 relates) are less than 
$500,000. The ``taxable year'' to be used for determining gross receipts 
is the taxpayer's income tax year. All gross receipts of the taxpayer 
shall be included, not just the gross receipts of the business subject 
to special tax. Proprietors of new businesses that have not yet begun a 
taxable year, as well as proprietors of existing businesses that have 
not yet ended a taxable year, who commence a new activity subject to 
special tax, qualify for the reduced special (occupational) tax rate, 
unless the business is a member of a ``controlled group''; in that case, 
the rules of paragraph (c) of this section shall apply.

[[Page 149]]

    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' shall 
be replaced by the words ``more than 50 percent'' in each place they 
appear in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during such year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5731)



Sec. 270.33  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on Form 5630.5 shall be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 270.34).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: that is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with a permit application, and if the information previously 
provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 270.185.
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any officer. In each case, the

[[Page 150]]

person signing the return shall designate his or her capacity as 
``individual owner,'' ``member of firm,'' or, in the case of a 
corporation, the title of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.

(26 U.S.C. 5142, 6061, 6065, 6151, 7011)



Sec. 270.34  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.113 of this chapter.
    (b) Application for employer identification number. Each taxpayer 
who files a special tax return, who has not already been assigned an 
employer identification number, shall file IRS Form SS-4 to apply for 
one. The taxpayer shall apply for and be assigned only one employer 
identification number, regardless of the number of places of business 
for which the taxpayer is required to file a special tax return. The 
employer identification number shall be applied for no later than 7 days 
after the filing of the taxpayer's first special tax return. IRS Form 
SS-4 may be obtained from the director of an IRS service center or from 
any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any supplementary 
statement, in accordance with the instructions on the form or issued in 
respect to it.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17560, May 17, 1988, as amended by T.D. ATF-301, 55 
FR 47658, Nov. 14, 1990]



Sec. 270.35  Issuance, distribution, and examination of special tax stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5 together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment required by Sec. 270.33(c)(2), but showing, as to name and 
address, only the name of the taxpayer and the address of the taxpayer's 
principal place of business (or principal office in the case of a 
corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
type on each stamp the address of the business conducted at the location 
for which that stamp is designated. The taxpayer shall then forward each 
stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by ATF officers, 
at the location for which designated, during business hours.

(26 U.S.C. 5146, 6806)



Sec. 270.36  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on ATF Form 5630.5, the 
manufacturer shall file an amended special tax return as soon as 
practicable after the change,

[[Page 151]]

covering the new corporate or firm name, or trade names. No new special 
tax is required to be paid. The manufacturer shall attach the special 
tax stamp for endorsement of the change in name.
    (b) Change in proprietorship--(1) General. If there is a change in 
the proprietorship of a tobacco factory, the successor shall pay a new 
special tax and obtain the required special tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which he or she began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The widowed spouse or child, or executor, administrator, 
or other legal representative of the taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.
    (d) Change in location. If there is a change in location of a 
taxable place of business, the manufacturer shall, within 30 days after 
the change, file with ATF an amended special tax return covering the new 
location. The manufacturer shall attach the special tax stamp or stamps, 
for endorsement of the change in location. No new special tax is 
required to be paid. However, if the manufacturer does not file the 
amended return within 30 days, the manufacturer is required to pay a new 
special tax and obtain a new special tax stamp.

(26 U.S.C. 5143, 7011)



                  Subpart D--Administrative Provisions



Sec. 270.41  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part. When a return, 
form, claim, or other document called for under this part is required by 
this part, or by the document itself, to be executed under penalties of 
perjury, it shall be executed under penalties of perjury.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46921, Sept. 23, 1981, as amended by T.D. ATF-232, 
51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, Dec. 1, 1986; T.D. 
ATF-372, 61 FR 20725, May 8, 1996]



Sec. 270.42  Authority of ATF officers to enter premises.

    Any ATF officer may enter in the daytime any premises where tobacco 
products are produced or kept, so far as it may be neccessary for the 
purpose of examining such products. When such premises are open at 
night, any ATF officer may enter them, while so open, in the performance 
of his official duties. The owner of such premises, or person having the 
superintendence of the same, who refuses to admit any ATF officer or 
permit him to examine such products shall be liable to the penalties 
prescribed by law for the offense.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 
43194, Dec. 1, 1986]

[[Page 152]]



Sec. 270.43  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this part, or endeavors to 
intimidate or impede any ATF officer acting in his official capacity, or 
forcibly rescues or attempts to rescue or causes to be rescued any 
property, after it has been duly seized for forfeiture to the United 
States in connection with a violation of the internal revenue laws, 
shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)



Sec. 270.44  Disposal of forfeited, condemned, and abandoned tobacco products.

    A Federal, State, or local officer shall not sell or cause to be 
sold for consumption in the United States any forfeited, condemned, or 
abandoned tobacco products in his custody upon which the Federal tax has 
not been paid, if in his opinion the sale thereof will not bring a price 
equal to the tax due and payable thereon and the expenses incident to 
the sale thereof. Where the products are not sold the officer may 
deliver them to a Federal or State hospital or institution (if they are 
fit for consumption) or cause their destruction by burning completely or 
by rendering them unfit for consumption. Where such products are sold 
they shall be released by the officer having custody thereof only after 
they are properly packaged and taxpaid. A receipt from the regional 
director (compliance) evidencing payment of tax on such products shall 
be presented to the officer having custody of the products, which tax 
shall be considered part of the sales price. Where tobacco products 
which have been packaged under the provisions of part 290 or part 295 of 
this chapter are to be released after payment of tax, the purchaser 
shall appropriately mark each package ``Federal Tax Paid (date)'' before 
the officer having custody of the products releases them:

Provided, That if the purchaser is a qualified manufacturer of tobacco 
products, or for products packaged under part 290 a qualified export 
warehouse proprietor, the products may be released without such marking 
of the packages if the manufacturer or proprietor does not intend to 
place such products on the domestic market for taxable products but will 
dispose of them otherwise, such as by destruction or return to bond 
through claim for refund, and files a written statement to that effect, 
in original only, with the officer having custody of the products. In 
the case of products forfeited under the internal revenue laws the sale 
shall be subject to the provisions of part 172 of this chapter.

(68A Stat. 870, as amended, 72 Stat. 1425, as amended; 26 U.S.C. 7325, 
5753)

[T.D. 6961, 33 FR 9488, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. 
ATF-243, 52 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19339, May 22, 
1987]



Sec. 270.45  Alternate methods or procedures.

    A manufacturer of tobacco products, on specific approval by the 
Director as provided in this section, may use an alternate method or 
procedure in lieu of a method or procedure specifically prescribed in 
this part. The Director may approve an alternate method or procedure, 
subject to stated conditions, when he finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure,
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue, and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part.

No alternate method or procedure relating to the giving of any bond or 
to the assessment, payment, or collection of tax, shall be authorized 
under this section. Where a manufacturer desires to employ an alternate 
method or procedure, he shall submit a written application to do so, in 
triplicate, to the regional director (compliance) for transmittal to the 
Director. The application

[[Page 153]]

shall specifically describe the proposed alternate method or procedure, 
and shall set forth the reasons therefor. Alternate methods or 
procedures shall not be employed until the application has been approved 
by the Director. The manufacturer shall, during the period of 
authorization of an alternate method or procedure, comply with the terms 
of the approved application. Authorization for any alternate method or 
procedure may be withdrawn whenever in the judgment of the Director the 
revenue is jeopardized or the effective administration of this part is 
hindered. The manufacturer shall retain, as part of his records, any 
authorization of the Director under this section.



Sec. 270.46  Emergency variations from requirements.

    The Director may approve methods of operation other than as 
specified in this part, where he finds that an emergency exists and the 
proposed variations from the specified requirements are necessary, and 
the proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications.
    (b) Will not hinder the effective administration of this part, and
    (c) Will not be contrary to any provision of law.

Variations from requirements granted under this section are conditioned 
on compliance with the procedures, conditions, and limitations set forth 
in the approval of the application. Failure to comply in good faith with 
such procedures, conditions, and limitations shall automatically 
terminate the authority for such variations and the manufacturer 
thereupon shall fully comply with the prescribed requirements of 
regulations from which the variations were authorized. Authority for any 
variations may be withdrawn whenever in the judgment of the Director the 
revenue is jeopardized or the effective administration of this part is 
hindered by the continuation of such variation. Where a manufacturer 
desires to employ such variation, he shall submit a written application 
to do so, in triplicate, to the regional director (compliance) for 
transmittal to the Director. The application shall describe the proposed 
variations and set forth the reasons therefor. Variations shall not be 
employed until the application has been approved. The manufacturer shall 
retain, as part of his records, any authorization of the Director under 
this section.



Sec. 270.47  Other businesses within factory.

    The Director may authorize such other businesses within the factory 
as he finds will not jeopardize the revenue, will not hinder the 
effective administration of this part, and will not be contrary to law. 
Where a manufacturer desires to engage in another business within the 
factory he shall submit a written application to do so, in triplicate, 
to the regional director (compliance) for the region in which the 
factory is located, for his transmittal to the Director. A manufacturer 
shall not engage in such other business until the application is 
approved by the Director. The manufacturer shall retain, as part of his 
records, any authorization of the Director under this section.

[T.D. 6840, 30 FR 9310, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 270.48  Penalties and forfeitures.

    Anyone who fails to comply with the provisions of this part becomes 
liable to the civil and criminal penalties, and forfeitures, provided by 
law.

(72 Stat. 1425, 1426; 26 U.S.C. 5761, 5762, 5763)



Sec. 270.49  Delegations of the Director.

    The Director has general authority to take action on all matters 
under the regulations in this part 270. Some of the authorities in this 
part are redelegated to ``appropriate ATF officers''. The title of the 
appropriate ATF officer for each delegation is listed by section in ATF 
Order 1130.15, Delegation Order--Delegation of Certain of the Director's 
Authorities in 27 CFR Parts 270, 275, and 296. ATF delegation orders, 
such as ATF Order 1130.15, are available from the ATF Distribution 
Center, PO Box 5950, Springfield, Virginia 22150-5190, or from the ATF 
web site (http://www.atf.treas.gov).

[T.D. ATF-420, 64 FR 71940, Dec. 22, 1999]

[[Page 154]]



         Subpart E--Qualification Requirements for Manufacturers



Sec. 270.61  Qualification--General.

    (a) Who must qualify. Every person who produces tobacco products 
except for his or her own personal consumption or use, shall qualify as 
a manufacturer of tobacco products in accordance with the provisions of 
this part.
    (b) Minimum manufacturing and activity requirements. A permit to 
manufacture tobacco products will only be granted to those persons whose 
principal business activity under such permit will be the original 
manufacture of tobacco products. A permit will not be granted to any 
person whose principal activity under such permit will be to receive or 
transfer tobacco products in bond. As a minimum activity requirement, in 
order to qualify for a permit, the quantity of tobacco products 
manufactured under the permit must exceed the quantity to be transferred 
or received in bond under the permit. For the purposes of this section, 
repackaging or relabeling activities alone do not qualify as a 
manufacturing activity.

[T.D. ATF-421, 64 FR 71923, Dec. 22, 1999]



Sec. 270.61a  Transitional rule.

    Any person who:
    (a) On August 5, 1997, was engaged in business as a manufacturer of 
roll-your-own tobacco, and
    (b) Before January 1, 2000, submits an application, as provided in 
this part, to engage in such business, may, continue to engage in such 
business pending final action on such application. Pending such final 
action, all provisions of chapter 52 of the Internal Revenue Code of 
1986 shall apply to such applicant in the same manner and to the same 
extent as if such applicant were a holder of a permit to manufacture 
roll-your-own tobacco under such chapter 52.

[T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 270.62  Application for permit.

    Every person, before commencing business as a manufacturer of 
tobacco products as defined in Sec. 270.11, shall make application for, 
and obtain, the permit provided in Sec. 270.75, covering operations at 
each proposed factory. Such application shall be made on Form 2093, in 
duplicate, to the regional director (compliance) for the region in which 
the proposed factory will be located. All documents required under this 
part to be furnished with such application shall be made a part thereof. 
Where the applicant for a permit under this section holds a permit or 
permits authorizing the production of any tobacco products at premises 
to be covered by the permit applied for, the applicant shall surrender 
such permit or permits for cancellation, upon the issuance of the permit 
applied for.

(72 Stat. 1421; 26 U.S.C 5712)



Sec. 270.63  Corporate documents.

    Every corporation, before commencing business as a manufacturer of 
tobacco products, shall furnish with its application for permit, 
required by Sec. 270.62, a true copy of the corporate charter or a 
certificate of corporate existence or incorporation executed by the 
appropriate officer of the State in which incorporated. The corporation 
shall likewise furnish duly authenticated extracts of the stockholders' 
meetings, bylaws, or directors' meetings, listing the offices the 
incumbents of which are authorized to sign documents or otherwise act in 
behalf of the corporation in matters relating to 26 U.S.C. chapter 52, 
and regulations issued thereunder. The corporation shall also furnish 
evidence, in duplicate, of the identity of the officers and directors 
and each person who holds more than ten percent of the stock of such 
corporation. Where any of the information required by this section has 
previously been filed with the same regional director (compliance) and 
such information is currently complete and accurate, a written statement 
to that effect, in duplicate, will be sufficient for the purpose of this 
section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5712))

[T.D. 6840, 30 FR 9310, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979]

[[Page 155]]



Sec. 270.64  Articles of partnership or association.

    Every partnership or association, before commencing business as a 
manufacturer of tobacco products, shall furnish with its application for 
permit, required by Sec. 270.62, a true copy of the articles of 
partnership or association, if any, or certificate of partnership or 
association where required to be filed by any State, county, or 
municipality. Where a partnership or association has previously filed 
such documents with the same regional director (compliance) and such 
documents are currently complete and accurate, a written statement, in 
duplicate, to that effect by the partnership or association will be 
sufficient for the purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 270.65  Trade name certificate.

    Every person, before commencing business under a trade name as a 
manufacturer of tobacco products, shall furnish with his application for 
permit, required by Sec. 270.62, a true copy of the certificate or other 
document, if any, issued by a State, county, or municipal authority in 
connection with the transaction of business under such trade name. If no 
such certificate or other document is so required, a written statement, 
in duplicate, to that effect by such person will be sufficient for the 
purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 270.66  Bond.

    Every person, before commencing business as a manufacturer of 
tobacco products, shall file, in connection with his application for 
permit, a bond on Form 3070, in duplicate, in accordance with the 
applicable provisions of subpart G of this part, conditioned upon 
compliance with the provisions of chapter 52, I.R.C., and regulations 
thereunder, including, but not limited to, the timely payment of taxes 
imposed by such chapter and penalties and interest in connection 
therewith for which he may become liable to the United States: Provided, 
That any person who, on the effective date of this part, October 1, 
1961, has on file a valid and adequate bond, Form 2100, ``Bond--
Manufacturer of Cigars and Cigarettes,'' may continue, under such bond, 
the operations with respect to the permit to which that bond relates, in 
accordance with the provisions of this part.

(72 Stat. 1421, as amended; 26 U.S.C. 5711)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 270.67  Blanket bond.

    Where a manufacturer of tobacco products operates more than one 
factory in the same region he may, in lieu of filing separate bonds, 
file a blanket bond on Form 3070, in duplicate, in accordance with the 
provisions of Sec. 270.134, for any or all of the factories in the same 
region. The total amount of any blanket bond given under this section 
shall be available for the satisfaction of any liability incurred at any 
factory covered by the bond.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.68  Power of attorney.

    If the application for permit or any report, return, notice, 
schedule, or other document required to be executed is to be signed by 
an individual (including one of the partners for a partnership or one of 
the members of an association) as an attorney in fact for any person, or 
if an individual is to otherwise officially represent such person, power 
of attorney on Form 1534 shall be furnished to the regional director 
(compliance). (For power of attorney in connection with conference and 
practice requirements see subpart E, part 601 of this chapter.) Such 
power of attorney is not required for persons whose authority is 
furnished with the corporate documents as required by Sec. 270.63. Form 
1534 does not have to be filed again with an regional director 
(compliance) where such form has previously been submitted to that 
regional director (compliance) and is still in effect.

[T.D. 6840, 30 FR 9310, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 270.69  Factory premises.

    The premises to be used by a manufacturer of tobacco products as his 
factory may consist of more than one

[[Page 156]]

building, or portions of buildings, which need not be contiguous but 
must be located in the same city, town, or village: Except that, where 
the regional director (compliance) determines that a building or portion 
of a building which is not within the city, town, or village, is so 
conveniently and closely situated to the general factory premises as to 
present no jeopardy to the revenue and as to offer no hindrance to the 
administration of this part, he may authorize the inclusion of such 
building or portion of building as part of the factory. The buildings or 
portions of buildings shall be described in the application for permit 
and the bond by number, street, and city, town, or village, and State. 
If any of the following conditions exist a diagram shall also be 
furnished, in duplicate, showing the information indicated:
    (a) Where the factory is in more than one building, and each 
building is not identifiable by a separate street address--identify each 
building by a letter, number, or similar designation;
    (b) Where the factory consists of a portion of a building or where 
portions of buildings are part of the factory--show the particular floor 
or floors, or room or rooms, comprising the factory;
    (c) Where there is an adjoining retail store operated by the 
manufacturer tobacco products including any doors or other openings 
between the premises.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6840, 30 FR 9310, July 27, 1965, as amended by T.D. 6871, 31 FR 
33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 15, 1975, as amended 
by T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, 
Dec. 1, 1986]



Sec. 270.70  Separation of and access to factory.

    Where the factory consists of a portion of a building, or where 
portions of buildings are part of the factory, the factory shall be 
completely separated by walls from adjoining portions of the building. 
Such walls shall be securely constructed of substantial materials. The 
regional director (compliance) may, wherever he finds that the revenue 
will not be jeopardized, authorize openings and doors in such walls or 
means of separation other than walls if such means adequately delineate 
the factory. The factory shall be accessible directly from a street, 
yard, common passageway, or other common means of entrance.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 270.71  Factories established prior to October 1, 1961.

    Factories established prior to the effective date of this part, 
October 1, 1961, shall not be subject to the provisions of Sec. 270.70 
if, in the opinion of the regional director (compliance), the existing 
premises afford adequate protection to the revenue.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 270.72  Use of factory premises.

    Unless otherwise authorized by the Director as provided in 
Sec. 270.47, the factory premises shall be used exclusively for the 
purposes of manufacturing and storing tobacco products; storing 
materials, equipment, and supplies related thereto or used or useful in 
the conduct of the business; and carrying on activities in connection 
with the business of the manufacturer: Provided, That tobacco products 
manufacturers who maintain adequate records in respect to the 
manufacture and storage of smoking tobacco that is not subject to tax 
(as well as with respect to tobacco products), showing the date and 
total quantity in pounds of the tobacco received, shipped or delivered, 
lost, and destroyed, may continue such operations on the tobacco 
products factory premises, without application for authorization as 
prescribed in Sec. 270.47.

[T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48839, Nov. 27, 1989]



Sec. 270.73  Additional information.

    The regional director (compliance) may require such additional 
information as he may deem necessary to determine whether the applicant 
is entitled to a permit under the provisions of this part. The applicant 
shall, when required by the regional director (compliance), furnish as a 
part of his application for such permit such additional information as 
may be necessary for the regional director (compliance) to

[[Page 157]]

determine whether the applicant is entitled to a permit.



Sec. 270.74  Investigation of applicant.

    As the regional director (compliance) deems necessary he will cause 
inquiry or investigation to be made to verify the information furnished 
in connection with an application for permit and to ascertain whether 
the applicant is, by reason of his business experience, financial 
standing, and trade connections, likely to maintain operations in 
compliance with 26 U.S.C. chapter 52, and regulations thereunder; 
whether such person has disclosed all material information required or 
made any material false statement in the application for such permit; 
and whether the premises on which it is proposed to establish the 
factory are adequate to protect the revenue. If the regional director 
(compliance) has reason to believe that the applicant is not entitled to 
a permit, he shall promptly give the applicant notice of the 
contemplated disapproval of his application and opportunity for hearing 
thereon in accordance with part 200 of this chapter, which part 
(including the provisions relating to the recommended decision and to 
appeals) is applicable to such proceedings. If, after such notice and 
opportunity for hearing, the regional director (compliance) finds that 
the applicant is not entitled to a permit, he shall, by order stating 
the findings on which his decision is based, deny the permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5713))

[26 FR 8174, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979]



Sec. 270.75  Issuance of permit.

    If the application for permit, together with the bond and supporting 
documents, required under this part is approved by him, the regional 
director (compliance) shall issue a permit on Form 2096 to the applicant 
as a manufacturer of tobacco products.

(72 Stat. 1421; 26 U.S.C. 5713)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 270.76  Retention of permit and supporting documents.

    The manufacturer shall retain his permit, together with the copy of 
the application and supporting documents returned to him with the 
permit, at the same place where the records required by this part are 
kept and they shall be made available for inspection by any ATF officer 
upon his request.

(72 Stat. 1421, 1423; 26 U.S.C. 5712, 5713, 5741)



    Subpart F--Changes After Original Qualification of Manufacturers

                             Changes in Name



Sec. 270.91  Change in individual name.

    Where there is a change in the name of an individual operating as a 
manufacturer, of tobacco products he shall, within 30 days of such 
change, make application on Form 2098 for an amended permit.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 270.92  Change in trade name.

    Where there is a change in, or an addition or discontinuance of, a 
trade name used by a manufacturer of tobacco products in connection with 
operations authorized by his permit the manufacturer shall, within 30 
days of such change, addition or discontinuance, make application on 
Form 2098 for an amended permit to reflect such change. The manufacturer 
shall also furnish a true copy of any new trade name certificate or 
document issued to him, or statement in lieu thereof, required by 
Sec. 270.65.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6840, 30 FR 9311, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 270.93  Change in corporate name.

    Where there is a change in the name of a corporate manufacturer of 
tobacco products, the manufacturer shall, within 30 days of such change, 
make application on Form 2098 for an amended permit. The manufacturer 
shall also furnish such documents as may be necessary to establish that 
the corporate name has been changed.

(72 Stat. 1421; 26 U.S.C. 5712)

[[Page 158]]

                    Changes in Ownership and Control



Sec. 270.101  Fiduciary successor.

    If an administrator, executor, receiver, trustee, assignee, or other 
fiduciary, is to take over the business of a manufacturer of tobacco 
products, as a continuing operation, such fiduciary shall, before 
commencing operations, make application for permit and file bond as 
required by subpart E, of this part, furnish certified copies, in 
duplicate, of the order of the court, or other pertinent documents, 
showing his appointment and qualification as such fiduciary, and make a 
commencing inventory, in accordance with the provisions of Sec. 270.201: 
Provided, That where a diagram has been furnished by the predecessor, in 
accordance with the provisions of Sec. 270.69, the successor may adopt 
such diagram if it is currently complete and accurate. However, where a 
fiduciary intends only to liquidate the business, qualification as a 
manufacturer of tobacco products will not be required if he promptly 
files with the regional director (compliance) a written statement to 
that effect, in duplicate, together with an extension of coverage of the 
predecessor's bond, executed by the fiduciary and the surety on such 
bond, in accordance with the provisions of Sec. 270.137.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5721)



Sec. 270.102  Transfer of ownership.

    If a transfer is to be made in ownership of the business of a 
manufacturer of tobacco products (including a change of any member of a 
partnership or association), such manufacturer shall give notice, in 
writing, to the regional director (compliance), naming the proposed 
successor and the desired effective date of such transfer. The proposed 
successor shall, before commencing operations, qualify as a manufacturer 
of tobacco products, in accordance with the applicable provisions of 
subpart E of this part: Provided, That where a diagram has been 
furnished by the manufacturer in accordance with the provisions of 
Sec. 270.69, the proposed successor may adopt such diagram if it is 
currently complete and accurate. The manufacturer shall give such notice 
of transfer, and the proposed successor shall make application for 
permit and file bond, as required, in ample time for examination and 
approval thereof before the desired date of such change. The predecessor 
shall make a concluding inventory and concluding report, in accordance 
with the provisions of Secs. 270.201 and 270.202, respectively, and 
surrender his permit with such inventory and report. The successor shall 
make a commencing inventory and commencing report, in accordance with 
the provisions of Sec. 270.201 and Sec. 270.202, respectively.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5713, 5721, 5722)



Sec. 270.103  Change in officers, directors, or stockholders of a corporation.

    Upon election or appointment (excluding successive reelection or 
reappointment) of any officer or director of a corporation operating the 
business of a manufacturer of tobacco products, or upon any occurrence 
which results in a person acquiring ownership or control of more than 
ten percent in aggregate of the outstanding stock of such corporation, 
the manufacturer shall, within 30 days of such action, so notify the 
regional director (compliance) in writing, giving the identity of such 
person. When there is any change in the authority furnished under 
Sec. 270.63 for officers to act in behalf of the corporation the 
manufacturer shall immediately so notify the regional director 
(compliance) in writing.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6840, 30 FR 9311, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 270.104  Change in control of a corporation.

    Where the issuance, sale, or transfer of the stock of a corporation, 
operating as a manufacturer of tobacco products, results in a change in 
the identity of the principal stockholders exercising actual or legal 
control of the operations of the corporation, the corporate manufacturer 
shall, within 30 days after the change occurs, make application on Form 
2093 for a new permit. Otherwise, the present permit shall be 
automatically terminated at the expiration of such 30-day period, and 
the manufacturer shall dispose of

[[Page 159]]

all tobacco products on hand, in accordance with this part, make a 
concluding inventory and concluding report, in accordance with the 
provisions of Secs. 270.201 and 270.202, respectively, and surrender his 
permit with such inventory and report. If the application for a new 
permit is timely made, the present permit shall continue in effect 
pending final action with respect to such application.

(72 Stat. 1421, 1422; 26 U.S.C. 5712, 5713, 5721, 5722)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                     Changes in Location of Factory



Sec. 270.111  Change in location within same region.

    Whenever a manufacturer of tobacco products intends to relocate his 
factory within the same region, the manufacturer shall, before 
commencing operations at the new location, make application on Form 2098 
for, and obtain, an amended permit. The application shall be supported 
by an extension of coverage of bond in accordance with the provisions of 
Sec. 270.137.

(72 Stat. 1421; 26 U.S.C. 5711, 5712)



Sec. 270.112  Change in address.

    Whenever any change occurs in the address, but not the location, of 
the factory of a manufacturer of tobacco products, as a result of action 
of local authorities, the manufacturer shall, within 30 days of such 
change, make application on Form 2098 for an amended permit.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 270.113  Change in location to another region.

    Whenever a manufacturer of tobacco products intends to remove his 
factory to another region, the manufacturer shall, before commencing 
operations at the new location, qualify as such a manufacturer in the 
new region, in accordance with the applicable provisions of subpart E of 
this part. The manufacturer shall notify the regional director 
(compliance) for the region from which he is removing his factory of his 
qualification in the new region, giving the address of the new location 
of his factory and the number of the permit issued to him in the new 
region, make a concluding inventory and concluding report in accordance 
with the provisions of Secs. 270.201 and 207.202, respectively, and 
surrender the permit for his old location with such inventory and 
report.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5713, 5721, 5722)



Sec. 270.114  Extension or curtailment of factory.

    Where a tobacco products factory is to be changed to an extent which 
will make inaccurate the description of the factory as set forth in the 
last application by the manufacturer for permit, on the diagram, if any, 
furnished with such application, the manufacturer shall first make an 
application on Form 2098 for, and obtain, an amended permit. Such 
application shall describe the proposed change in the factory and shall 
be accompanied by a new diagram if required under the provisions of 
Sec. 270.69.

(72 Stat. 1421; 26 U.S.C. 5711, 5712)



          Subpart G--Bonds and Extensions of Coverage of Bonds



Sec. 270.131  Corporate surety.

    (a) Surety bonds required under the provisions of this part may be 
given only with corporate sureties holding certificates of authority 
from the Secretary of the Treasury as acceptable sureties on Federal 
bonds. Each bond and each extension of coverage of bond shall at the 
time of filing be accompanied by a power of attorney authorizing the 
agent or officer who executed the bond to so act on behalf of the 
surety. The regional director (compliance) who is authorized to approve 
the bond may, whenever he deems it necessary, require additional 
evidence of the authority of the agent or officer to execute the bond or 
extension of coverage of bond. The power of attorney shall be prepared 
on a form provided by the surety company and executed under the 
corporate seal of the company. If the power of attorney submitted is 
other than a manually signed document it

[[Page 160]]

shall be accompanied by a certificate of its validity. Limitations 
concerning corporate sureties are prescribed by the Secretary in 
Treasury Department Circular No. 570, as revised. The surety shall have 
no interest whatever in the business covered by the bond.
    (b) Treasury Department Circular No. 570 (Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies) is published in the Federal Register 
annually as of the first workday in July. As they occur, interim 
revisions of the circular are published in the Federal Register. Copies 
may be obtained from the Audit Staff, Bureau of Government Financial 
Operations, Department of the Treasury, Washington, DC 20226.

(61 Stat. 649, 72 Stat. 1421, as amended; 31 U.S.C. 9304, 9306; 26 
U.S.C. 5711; 5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. 6961, 33 FR 9488, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-92, 46 FR 46921, Sept. 23, 1981]



Sec. 270.132  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety the manufacturer of tobacco products may 
pledge and deposit, as security for his bond, securities which are 
transferable and are guaranteed as to both interest and principal by the 
United States, in accordance with the provisions of 31 CFR part 225.

(61 Stat. 650, 72 Stat. 1421; 6 U.S.C.9301, 9303; 26 U.S.C. 5711)



Sec. 270.133  Amount of individual bond.

    The amount of the bond of a manufacturer of tobacco products shall 
be not less than the total amount of tax liability on all tobacco 
products manufactured in his factory, received in bond from other 
factories and from export warehouses, and released to him in bond from 
customs custody, during any calendar month. Where the amount of any bond 
is no longer sufficient and the bond is in less than the maximum amount, 
the manufacturer shall immediately file a strengthening or superseding 
bond as required by this subpart. The amount of any such bond (or the 
total amount including strengthening bonds, if any) need not exceed 
$250,000 for a manufacturer producing or receiving cigarettes in bond; 
need not exceed $150,000 for a manufacturer producing or receiving 
cigars, smokeless tobacco, pipe tobacco, or roll-your-own tobacco in 
bond; and need not exceed $250,000 for a manufacturer producing or 
receiving any combination of tobacco products in bond. The bond of a 
manufacturer of tobacco products shall in no case be less than $1,000.

[T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48839, Nov. 27, 1989; 
T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 270.134  Amount of blanket bond.

    In the case of a blanket bond filed under the provisions of 
Sec. 270.67, where the total amount of individual bonds otherwise 
required for the factories under Sec. 270.133 does not exceed $250,000, 
such blanket bond shall be not less than the total amount of such 
individual bonds. Where the total amount of such individual bonds 
required is in excess of $250,000 but not in excess of $500,000, the 
amount of the blanket bond shall be not less than $250,000 plus 50 
percent of such total amount which is in excess of $250,000. Where the 
total amount of such individual bonds required is in excess of $500,000 
the amount of the blanket bond shall be not less than $375,000 plus 25 
percent of such total amount which is in excess of $500,000.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.135  Strengthening bond.

    Where the amount of any bond is no longer sufficient under the 
provisions of Sec. 270.133 or Sec. 270.134, the manufacturer shall 
immediately file a strengthening bond in an appropriate amount with the 
same surety as that on the bond already in effect, unless a superseding 
bond is filed pursuant to Sec. 270.136. Strengthening bonds will not be 
approved where any notation is made thereon which is intended, or which 
may be construed, as a release of any former bond, or as limiting the 
amount of either bond to less than its full amount.

(72 Stat. 1421; 26 U.S.C. 5711)

[[Page 161]]



Sec. 270.136  Superseding bond.

    A manufacturer of tobacco products shall immediately file a new bond 
to supersede his current bond when (a) the corporate surety on the 
current bond becomes insolvent, (b) the regional director (compliance) 
approves a request from the surety on the current bond to terminate his 
liability under the bond, (c) payment of any liability under a bond is 
made by the surety thereon, (d) the amount of the bond is no longer 
sufficient under the provisions of Sec. 270.133 or Sec. 270.134 and a 
strengthening bond has not been filed, or (e) the regional director 
(compliance) considers such a superseding bond necessary for the 
protection of the revenue. Where a bond is not filed as required under 
the provisions of this section the manufacturer shall discontinue 
forthwith the operations to which such bond relates.

(72 Stat. 1421: 26 U.S.C. 5711)



Sec. 270.137  Extension of coverage of bond.

    An extension of coverage of bond shall be manifested on Form 2105 by 
the manufacturer of tobacco products and by the surety on the bond with 
the same formality and proof of authority as required for the execution 
of the bond.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.138  Approval of bond and extension of coverage of bond.

    No person shall commence operations under any bond, nor extend his 
operations, until he receives from the regional director (compliance) 
notice of his approval of the bond or of an appropriate extension of 
coverage of the bond required under this part.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.139  Termination of bond.

    Any bond required by this part may be terminated by the regional 
director (compliance) as to liability for future operations (a) pursuant 
to application by the surety as provided in the bond, (b) on approval of 
a superseding bond, or (c) when operations by the manufacturer are 
permanently discontinued in accordance with subpart J. After a bond is 
terminated the surety shall remain bound with respect to any liability 
for unpaid taxes, penalties, and interest, not in excess of the amount 
of the bond, incurred by the manufacturer prior to the termination date.

(72 Stat. 1421; 26 U.S.C. 5711)

[T.D. 6840, 30 FR 9311, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 270.140  Release of pledged securities.

    Securities of the United States pledged and deposited as provided in 
Sec. 270.132 shall be released only in accordance with the provisions of 
31 CFR part 225. Such securities will not be released by the regional 
director (compliance) until liability under the bond for which they were 
pledged has been terminated. When the regional director (compliance) is 
satisfied that they may be released, he shall fix the date or dates on 
which a part or all of such securities may be released. At any time 
prior to the release of such securities, the regional director 
(compliance) may extend the date of release for such additional length 
of time as he deems necessary.

(61 Stat. 650, 72 Stat. 1421; 31 U.S.C. 9301, 9303, 26 U.S.C. 5711)



                 Subpart H--Operations by Manufacturers

         Determination and Payment of Taxes on Tobacco Products.



Sec. 270.161  Determination of tax and method of payment.

    Except for removals in bond and transfers in bond, as authorized by 
law, the taxes imposed on tobacco products by section 5701, I.R.C., 
shall be determined at the time of removal of such products and paid on 
the basis of a return, in accordance with the provisions of this part.

(72 Stat. 1417; 26 U.S.C. 5703)

[T.D. 6929, 32 FR 13866, Oct. 5, 1967. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986]



Sec. 270.162  Semimonthly tax return.

    Every manufacturer of tobacco products shall file, for each of his 
factories, a semimonthly tax return on Form

[[Page 162]]

5000.24 for each return period, including any period during which a 
manufacturer begins or discontinues business. The return shall be filed 
with ATF in accordance with the instructions on the form. The 
manufacturer shall file the return at the time specified in Sec. 270.165 
regardless of whether tobacco products are removed or whether tax is due 
for that particular return period. However, when the manufacturer 
requests by letter and the regional director (compliance) grants 
specific authorization, the manufacturer need not during the term of 
such authorization file a tax return for which tax is not due or 
payable.

[T.D. ATF-232, 51 FR 35353, Oct. 3, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-251, 52 FR 19339, May 22, 1987]



Sec. 270.163  Semimonthly tax return periods.

    Except as provided in section 270.164, the periods to be covered by 
semimonthly tax returns shall be from the 1st day of each month through 
the 15th day of that month and from the 16th day of each month through 
the last day of that month.

[T.D. ATF-365, 60 FR 33675, June 28, 1995]



Sec. 270.164  Special rule for taxes due for the month of September (effective after December 31, 1994).

    (a)(1) Except as provided in paragraph (a)(2) of this section, the 
second semimonthly period for the month of September shall be divided 
into two payment periods, from the 16th day through the 26th day, and 
from the 27th day through the 30th day. The manufacturer shall file a 
return on Form 5000.24, and make remittance, for the period September 
16-26, no later than September 29. The manufacturer shall file a return 
on Form 5000.24, and make remittance, for the period September 27-30, no 
later than October 14.
    (2) Taxpayment not by electronic fund transfer. In the case of taxes 
not required to be remitted by electronic fund transfer as prescribed by 
Sec. 270.165a, the second semimonthly period of September shall be 
divided into two payment periods, from the 16th day through the 25th 
day, and the 26th day through the 30th day. The manufacturer shall file 
a return on Form 5000.24, and make remittance, for the period September 
16-25, no later than September 28. The manufacturer shall file a return 
on Form 5000.24, and make remittance, for the period September 26-30, no 
later than October 14.
    (b) Amount of payment: Safe harbor rule. (1) Taxpayers are 
considered to have met the requirements of paragraph (a)(1) of this 
section, if the amount paid no later than September 29 is not less than 
11/15 (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (2) Taxpayers are considered to have met the requirements of 
paragraph (a)(2) of this section, if the amount paid no later than 
September 28 is not less than 2/3rds (66.7 percent) of the tax liability 
incurred for the semimonthly period beginning on September 1 and ending 
on September 15, and if any underpayment of tax is paid by October 14.
    (c) Last day for payment. If the required due date for taxpayment 
for the periods September 16-25 or September 16-26 as applicable, falls 
on a Saturday or legal holiday, the return and remittance shall be due 
on the immediately preceding day. If the required due date falls on a 
Sunday, the return and remittance shall be due on the immediately 
following day.
    (d) Example. Payment of tax for the month of September--(1) Facts. 
X, a manufacturer of tobacco products required to pay taxes by 
electronic fund transfer, incurred tax liability in the amount of 
$30,000 for the first semimonthly period of September. For the period 
September 16-26, X incurred tax liability in the amount of $45,000, and 
for the period September 27-30, X incurred tax liability in the amount 
of $2,000.
    (2) Payment requirement. X's payment of tax in the amount of $30,000 
for the first semimonthly period of September is due no later than 
September 29 (Sec. 270.165(a)). X's payment of tax for the period 
September 16-26 is also due no later than September 29 
(Sec. 270.164(a)(1)). X may use the safe harbor rule to determine the 
amount of payment due for the period of September 16-26

[[Page 163]]

(Sec. 270.164(b)). Under the safe harbor rule, X's payment of tax must 
equal $21,990.00, 11/15ths of the tax liability incurred during the 
first semimonthly period of September. Additionally, X's payment of tax 
in the amount of $2,000 for the period September 27-30 must be paid no 
later than October 14 (Sec. 270.164(a)(1)). X must also pay the 
underpayment of tax, $23,010.00, for the period September 16-26, no 
later than October 14 (Sec. 270.164(b)).

[T.D. ATF-365, 60 FR 33675, June 28, 1995]



Sec. 270.165  Times for filing semimonthly return.

    (a) General. Except as provided by Sec. 270.164, and paragraph (b) 
of this section, semimonthly returns on Form 5000.24 shall be filed, for 
each return period, not later than the 14th day after the last day of 
the return period. If the due date falls on a Saturday, Sunday, or legal 
holiday, the return and remittance shall be due on the immediately 
preceding day which is not a Saturday, Sunday, or legal holiday, except 
as provided by Sec. 270.164(c).
    (b) Postmark. The official postmark of the U.S. Postal Service 
stamped on the cover in which the return was mailed shall be considered 
the date of delivery of the tax return and, if the return was 
accompanied by a remittance, the date of delivery of the remittance. 
When the postmark is illegible, the manufacturer shall prove when the 
postmark was made. When the proprietor sends the tax return with or 
without remittance by registered mail or by certified mail, the date of 
registry or the date of the postmark on the sender's receipt of 
certified mail, as the case may be, shall be treated as the date of 
delivery of the tax return and, if accompanied, of the remittance.

[T.D. ATF-246, 52 FR 669, Jan. 8, 1987, as amended by T.D. ATF-251, 52 
FR 19339, May 22, 1987; T.D. ATF-365, 60 FR 33675, June 28, 1995; T.D. 
ATF-446, 66 FR 16602, Mar. 27, 2001]



Sec. 270.165a  Payment of tax by electronic fund transfer.

    (a) General. (1) Each taxpayer who was liable, during a calendar 
year, for a gross amount equal to or exceeding five million dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes 
combining tax liabilities incurred under this part and parts 275 and 285 
of this chapter, shall use a commercial bank in making payment by 
electronic fund transfer (EFT) of taxes on tobacco products, cigarette 
papers, and cigarette tubes during the succeeding calendar year. Payment 
of taxes on tobacco products by cash, check, or money order, as 
described in Sec. 270.168, is not authorized for a taxpayer who is 
required, by this section, to make remittances by EFT. For purposes of 
this section, the dollar amount of tax liability is defined as the gross 
tax liability on all taxable withdrawals and importations (including 
tobacco products, cigarette papers, and cigarette tubes brought into the 
United States from Puerto Rico or the Virgin Islands) during the 
calendar year, without regard to any drawbacks, credits, or refunds, for 
all premises from which such activities are conducted by the taxpayer. 
Overpayments are not taken into account in summarizing the gross tax 
liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (3) A taxpayer who is required by this section to make remittances 
by EFT, shall make a separate EFT remittance and file a separate return, 
Form 5000.24, for each factory from which tobacco products are withdrawn 
upon determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the

[[Page 164]]

tax by EFT, each taxpayer who was liable for a gross amount equal to or 
exceeding five million dollars in taxes on tobacco products, cigarette 
papers, and cigarette tubes combining tax liabilities incurred under 
this part and parts 275 and 285 of this chapter, during the previous 
calendar year, shall notify, in writing, the regional director 
(compliance), for each region in which taxes are paid. The notice shall 
be an agreement to make remittances by EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the tax payment to the Treasury Account as provided in 
paragraph (e) of this section. The request shall be made to the bank 
early enough for the transfer to be made to the Treasury Account by no 
later than the close of business on the last day for filing the return, 
prescribed in Sec. 270.165 or Sec. 270.167. The request shall take into 
account any time limit established by the bank.
    (3) If a taxpayer was liable for less than five million dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes 
combining tax liabilities incurred under this part and parts 275 and 285 
of this chapter during the preceding calendar year, the taxpayer may 
choose either to continue remitting the tax as provided in this section 
or to remit the tax with the return on as prescribed by Sec. 270.168. 
Upon filing the first return which the taxpayer chooses to discontinue 
remitting the tax by EFT and to begin remitting the tax with the tax 
return, the taxpayer shall notify the regional director (compliance) by 
attaching a written notification to Form 5000.24, stating that no taxes 
are due by EFT, because the tax liability during the preceding calendar 
year was less than five million dollars, and that the remittance shall 
be filed with the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the return, Form 
5000.24, information about remitting the tax for that return period by 
EFT and shall file the return with the ATF, in accordance with the 
instructions on Form 5000.24.
    (2) Remittances shall be considered as made when the taxpayment by 
electronic fund transfer is received by the Treasury Account. For 
purposes of this section, a taxpayment by electronic fund transfer shall 
be considered as received by the Treasury Account when it is paid to a 
Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an electronic fund 
transfer message as required by paragraph (b)(2) of this section, any 
transfer data record furnished to the taxpayer, through normal banking 
procedures, will serve as the record of payment, and shall be retained 
as part of required records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5761, 6651, or 6656, as applicable, for 
failure to make a tax payment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the regional director (compliance) will issue to the 
taxpayer an ATF Procedure entitled, Payment of Tax by Electronic Fund 
Transfer. This publication outlines the procedure a taxpayer is to 
follow when preparing returns and EFT remittances in accordance with 
this part. The U.S. Customs Service will provide the taxpayer with 
instructions for preparing EFT remittances for payments to be made to 
the U.S. Customs Service.

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended (26 U.S.C. 5703))

[T.D. ATF-198, 49 FR 37582, Sept. 25, 1984, as amended by T.D. ATF-219, 
50 FR 51390, Dec. 17, 1985; T.D. ATF-232, 51 FR 28081, Aug. 5, 1986; 
T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-245, 52 FR 533, Jan. 
7, 1987; T.D. ATF-251, 52 FR 19339, May 22, 1987; T.D. ATF-262, 52 FR 
47560, Dec. 15, 1987; T.D. ATF-446, 66 FR 16602, Mar. 27, 2001]



Sec. 270.166  Default, prepayment of tax required.

    Where a check or money order tendered with any return, whether semi-
monthly or prepayment, for payment of tax on tobacco products is not 
paid on presentment, where a manufacturer fails to remit with the return 
the full amount of tax due thereunder, or where a manufacturer is 
otherwise in default in payment of tax on tobacco products under the 
internal revenue

[[Page 165]]

laws or this chapter, during the period of such default and until the 
regional director (compliance) finds that the revenue will not be 
jeopardized by the deferred payment of tax pursuant to the provisions of 
this part, no tobacco products shall be removed subject to tax until the 
tax thereon has first been paid as provided in Sec. 270.167. Any 
remittance made during the period of a default shall be in cash, or in 
the form of a certified, cashier's, or treasurer's check drawn on any 
bank or trust company incorporated under the laws of the United States, 
or under the laws of any State, Territory, or possession of the United 
States, or in the form of a U.S. postal money order or other money 
order, and defined in Sec. 70.61 of this chapter (payment by check or 
money order), or shall be delivered in the form of an electronic fund 
transfer message as provided in Sec. 270.165a.

(68A Stat. 777, 72 Stat. 1417; 26 U.S.C. 6311, 5703; Aug. 16, 1954, ch. 
736, 68A Stat. 707 (26 U.S.C. 5703); Aug. 16, 1954, ch. 736, 68A Stat. 
777 (26 U.S.C. 6311))

[T.D. 6871, 31 FR 34, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-77, 46 FR 3008, Jan. 13, 1981; T.D. ATF-232, 51 FR 28081, Aug. 5, 
1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-301, 55 FR 
47658, Nov. 14, 1990]



Sec. 270.167  Prepayment tax return.

    (a) To prepay the tax on tobacco products a manufacturer shall file 
a prepayment tax return on Form 5000.24 showing the tax to be paid on 
the tobacco products prior to removal. The return shall be executed and 
filed, prior to the removal of such products, with ATF, in accordance 
with the instructions on the form. A manufacturer prepaying the taxes on 
tobacco products under the provisions of this section shall continue to 
file semimonthly returns as required by Sec. 270.162.
    (b) However, if a manufacturer is required by Sec. 270.165a to pay 
the tax by electronic fund transfer, the manufacturer shall prepay the 
tax before any tobacco products can be removed for consumption or sale 
by completing the return and filing it with ATF, in accordance with the 
instructions on the form. At the same time, the manufacturer shall 
direct his bank to effect an EFT.

(Sec. 202, Pub. L. 85-859, 68A Stat. 1417 (26 U.S.C. 5703); sec. 202, 
Pub. L. 85-859, 72 Stat. 1423, as amended (26 U.S.C. 5741); (Aug. 16, 
1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6302)); 26 U.S.C. 
7805 (68A Stat. 917, as amended))

[T.D. 6871, 31 FR 34, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-77, 46 FR 3008, Jan. 13, 1981; T.D. 
ATF-219, 50 FR 51390, Dec. 17, 1985; T.D. ATF-232, 51 FR 28081, Aug. 5, 
1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 
19340, May 22, 1987]



Sec. 270.168  Remittance with return.

    Except when an electronic fund transfer has been made under 
Sec. 270.165a for the full amount of tax due, the tax on tobacco 
products shown to be due and payable on any return shall be paid by 
remittance in full with the tax return. The remittance may be in the 
form which the regional director (compliance) is authorized to accept 
under Sec. 70.61 of this chapter (Payment by check or money order) and 
which is acceptable to him, except as otherwise specified in 
Sec. 270.166. Checks and money orders shall be made payable to the 
``Bureau of Alcohol, Tobacco and Firearms''. In paying the tax, a 
fractional part of a cent shall be disregarded unless it amounts to one-
half cent or more, in which case it shall be increased to one cent.

(68A Stat. 778, 72 Stat. 1417; 26 U.S.C. 6313, 5703; Aug. 16, 1954, ch. 
736, 68A Stat. 707, as amended (26 U.S.C. 5703))

[T.D. 6871, 31 FR 35, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-77, 46 FR 3009, Jan. 13, 1981; T.D. ATF-232, 51 FR 28081, Aug. 5, 
1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-301, 55 FR 
47658, Nov. 14, 1990]



Sec. 270.169  Employer identification number.

    The employer identification number (defined at 26 CFR 301.7701-12) 
of a manufacturer of tobacco products who has been assigned such a 
number shall be shown on each tax return, Form 5000.24. Failure of the 
manufacturer to include his employer identification number on Form 
5000.24 may result in

[[Page 166]]

assertion and collection of the penalty specified in Sec. 70.113 of this 
chapter.

[T.D. ATF-219, 50 FR 51390, Dec. 17, 1985, as amended by T.D. ATF-301, 
55 FR 47658, Nov. 14, 1990]



Sec. 270.170  Application for employer identification number.

    Every manufacturer of tobacco products who has neither secured an 
employer identification number nor made application therefor shall file 
an application on Form SS-4. Form SS-4 may be obtained from any service 
center director or from any district director. Such application shall be 
filed on or before the seventh day after the date on which any tax 
return under this part is filed. Each manufacturer shall make 
application for and shall be assigned only one employer identification 
number for all internal revenue tax purposes.

(75 Stat. 828; 26 U.S.C. 6109)

[T.D. 7055, 35 FR 13515, Aug. 25, 1970. Redesignated at 40 FR 16835, 
Apr. 15, 1975]



Sec. 270.171  Execution and filing of Form SS-4.

    The application on Form SS-4, together with any supplementary 
statement, shall be prepared in accordance with the form, instructions, 
and regulations applicable thereto, and shall set forth fully and 
clearly the data therein called for. The application shall be filed with 
the service center director serving any internal revenue district where 
the applicant is required to file returns under this part, except that 
hand-carried applications may be filed with the district director of any 
such district as provided for in 26 CFR 301.6091-1. The application 
shall be signed by (a) the individual if the person is an individual; 
(b) the president, vice president, or other principal officer if the 
person is a corporation; (c) a responsible and duly authorized member or 
officer having knowledge of its affairs if the person is a partnership 
or other unincorporated organization; or (d) the fiduciary if the person 
is a trust or estate.

(75 Stat. 828; 26 U.S.C. 6109)

[T.D. 7055, 35 FR 13515, Aug. 25, 1970. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979]

                                 Records



Sec. 270.181  General.

    Every manufacturer of tobacco products must keep records of his 
operations and transactions which shall reflect, for each day, the 
information specified in Secs. 270.182 and 270.183. For this purpose day 
shall mean calendar day, except that the regional director (compliance) 
may, upon application of the manufacturer by letter, in duplicate, 
authorize as such day for a factory a 24-hour cycle of operation other 
than the calendar day. A day once so established as other than the 
calendar day may be changed only by another application approved by the 
regional director (compliance). No specific form is required. The 
manufacturer may use commercial records from which the required 
information may be readily ascertained for this purpose. The 
manufacturer shall keep the auxiliary and supplemental records from 
which such records are compiled and shall keep supporting records, as 
specified in Secs. 270.184 and 270.186, of tobacco products removed 
subject to tax and transferred in bond. Except as provided in 
Secs. 270.184 and 270.186, the entries in the commercial records so 
maintained or kept shall be made not later than the close of the next 
business day following the day on which the transaction(s) occurred. As 
used in this section the term business day shall mean any day other than 
Saturday, Sunday, a legal holiday in the District of Columbia, or a 
statewide legal holiday in the State wherein the factory to which the 
records relate is located.

(72 Stat. 1423, as amended; 26 U.S.C. 5741)

[T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]

[[Page 167]]



Sec. 270.182  Record of tobacco.

    The record of a manufacturer of tobacco products shall show the date 
and total quantity in pounds, of all tobacco other than tobacco 
products:
    (a) Received (including tobacco resulting from reduction of cigars 
and cigarettes, and unpackaging of smokeless tobacco, pipe tobacco and 
roll-your-own tobacco), together with the name and address of the person 
from whom received;
    (b) Shipped or delivered, together with the name and address of the 
person to whom shipped or delivered;
    (c) Lost; and
    (d) Destroyed.

(Approved by the Office of Management and Budget under control number 
1512-0358)

[T.D. 6871, 31 FR 35, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. 
ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-289, 54 FR 48840, Nov. 27, 1989; T.D. ATF-424, 64 FR 
71931, Dec. 22, 1999]



Sec. 270.183  Record of tobacco products.

    The record of a manufacturer of tobacco products shall show the date 
and total quantities of all tobacco products, by kind (small cigars-
large cigars; small cigarettes-large cigarettes; chewing tobacco-snuff; 
pipe tobacco; roll-your-own tobacco):
    (a) Manufactured;
    (b) Received in bond by--
    (1) Transfer from other factories,
    (2) Release from customs custody,
    (3) Transfer from export warehouses, and
    (4) Transfer from foreign trade zone;
    (c) Received by return to bond;
    (d) Disclosed as an overage by inventory;
    (e) Removed subject to tax (itemize large cigars by sale price in 
accordance with Sec. 270.22, except cigars that cost more than $235.294 
may optionally be shown as if the price were $236 per thousand);
    (f) Removed, in bond, for--
    (1) Export,
    (2) Transfer to export warehouses,
    (3) Transfer to other factories,
    (4) Transfer to a foreign trade zone
    (5) Use of the United States, and
    (6) Experimental purposes off factory premises;
    (g) Otherwise disposed of, without determination of tax, by--
    (1) Consumption by employees on factory premises,
    (2) Consumption by employees off factory premises, together with the 
number of employees to whom furnished,
    (3) Use for experimental purposes on factory premises,
    (4) Loss,
    (5) Destruction, and
    (6) Reduction to materials;
    (h) Disclosed as a shortage by inventory; and
    (i) On which the tax has been determined and which are--
    (1) Received, and
    (2) Disposed of.

(Approved by the Office of Management and Budget under control number 
1512-0358)

[T.D. ATF-421, 64 FR 71923, Dec. 22, 1999, as amended by T.D. ATF-424, 
64 FR 71931, Dec. 22, 1999; T.D. ATF-420, 64 FR 71940, Dec. 22, 1999]



Sec. 270.184  Record of removals subject to tax.

    (a) Requirement. Every manufacturer of tobacco products must keep a 
record of tobacco products removed from the factory subject to tax. The 
manufacturer must make entries in this record at the time of removal. 
The record for each removal must show:
    (1) The date of removal,
    (2) The name and address of the person to whom shipped or delivered,
    (3) The kind and quantity of tobacco products removed, and
    (4) For large cigars, show the sale price (If the sale price is more 
than $235.294 per thousand, you may place a note to that effect in the 
record instead of the actual price).
    (b) Exceptions. (1) The record of removal may consist of the 
manufacturer's commercial documents, such as copies of invoices, rather 
than records prepared expressly to meet the requirements of this 
section. If commercial documents are used, they must be kept at the 
factory, contain all the details required by this section, and be clear 
and accurate. Commercial documents that do not show specifically the tax 
classification of tobacco products (including sale price of large 
cigars) are

[[Page 168]]

still acceptable if they contain adequate information for an ATF officer 
to readily ascertain the applicable tax.
    (2) Where tobacco products are delivered within the factory directly 
to the consumer, the record need not show the name and address of the 
consumer.

(Sec. 2128(c), Pub. L. 94-455, 90 Stat. 1921 (26 U.S.C. 5741))

[T.D. ATF-420, 64 FR 71941, Dec. 22, 1999]



Sec. 270.185  Retention of records.

    All records required to be kept under this part, including copies of 
authorizations, claims, inventories, notices, reports, returns and 
schedules, shall be retained by the manufacturer for three years 
following the close of the calendar year in which filed or made, or in 
the case of an authorization, for three years following the close of the 
calendar year in which the operation under such authorization is 
concluded. Such records shall be kept in the factory or a place 
convenient thereto, and shall be made available for inspection by any 
ATF officer upon his request.

(72 Stat. 1423; 26 U.S.C. 5741)



Sec. 270.186  Record in support of transfers in bond.

    Every manufacturer of tobacco products shall keep a supporting 
record of tobacco products transferred in bond to or received in bond 
from other factories, and shall make the entries therein at the time of 
each receipt or removal of such products. Such supporting records shall 
show the date of receipt or removal, the name of the manufacturer and 
address of the factory from which received or to which removed or the 
permit number of such factory, and the kind and quantity of tobacco 
products. Where the manufacturer keeps, at the factory, copies of 
invoices or other commercial records containing the information required 
as to each receipt and removal, in such orderly manner that the 
information may be readily ascertained therefrom, such copies will be 
considered the supporting record required by this section.

(Approved by the Office of Management and Budget under control number 
1512-0358)

(72 Stat. 1423, as amended; 26 U.S.C. 5741)

[T.D. 6871, 31 FR 35, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. 
ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



Sec. 270.187  Record of sales prices of large cigars.

    Every manufacturer of tobacco products who removes large cigars from 
the factory shall keep such records as are necessary to establish and 
verify the price for which the cigars are sold, in accordance with 
Sec. 270.22. The record shall be a continuing one of each brand and size 
of cigar so that the sale price on which the tax is based may be readily 
ascertained.

[ T.D. ATF-307, 55 FR 52743, Dec. 21, 1990. Redesignated and amended by 
T.D. ATF-420, 64 FR 71941, Dec. 22, 1999; T.D. ATF-420, 65 FR 1676, Jan. 
11, 2000]

                         Inventories and Reports



Sec. 270.201  Inventories.

    Every manufacturer of tobacco products shall make true and accurate 
inventories on Form 5210.9, which inventories shall include all tobacco 
products and tobacco on hand required to be accounted for in the records 
kept under this part. The manufacturer shall make such an inventory at 
the time of commencing business, which shall be the effective date of 
the permit issued upon original qualification under this part; at the 
time of transferring ownership; at the time of changing the location of 
his factory to a different region; at the time of concluding business; 
and at such other time as any ATF officer may require. Each inventory 
shall be prepared in duplicate, and shall be subject to verification by 
an ATF officer. The original of each such inventory shall be submitted 
to the regional director (compliance), and the

[[Page 169]]

duplicate shall be retained by the manufacturer.

(Approved by the Office of Management and Budget under control number 
1512-0358)

(72 Stat. 1422, 1423, as amended; 26 U.S.C. 5721, 5741)

[T.D. 6871, 31 FR 35, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. 
ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 270.202  Reports.

    (a) Monthly report. Every manufacturer of tobacco products shall 
make a report on Form 5210.5, in duplicate, for each month and for any 
portion of a month during which he engages in such business. Such report 
shall be made regardless of whether any operations or transactions 
occurred during the month or portion of a month covered therein. The 
report for a month or portion of a month in which business is commenced 
or is concluded shall be conspicuously marked ``Commencing Report'' or 
``Concluding Report,'' respectively. The original of the report shall be 
submitted to the regional director (compliance) not later than the 20th 
day of the month succeeding the month covered therein, and the duplicate 
shall be retained by the manufacturer. Each report shall show, for the 
period covered, the total quantity of tobacco products:
    (1) Manufactured,
    (2) Received in bond,
    (3) Received by return to bond,
    (4) Disclosed by inventory as an overage,
    (5) Removed subject to tax,
    (6) Removed in bond,
    (7) Otherwise disposed of without determination of tax,
    (8) Disclosed by inventory as a shortage, and
    (9) On hand, in bond, beginning of and end of month.
    (b) Report of wholesale prices of large cigars removed before 
January 1, 1991. Every manufacturer of tobacco products who removes 
large cigars from his factory, and who issues announcements such as 
those described in this paragraph, shall make a report of each 
establishment or change of wholesale price (suggested delivered price to 
retailers) for large cigars. The report shall consist of a copy of each 
general announcement that the manufacturer issues within his 
organization or to the trade about establishment or changes of wholesale 
prices. Only one copy of an announcement need be submitted even if it 
relates to tobacco products removed subject to tax from more than one 
factory. If this copy does not show the actual date when the 
announcement was issued, or identify the factory or factories from which 
removals of the cigars covered by the announcement are made, then the 
copy shall be annotated to show this information. The factory or 
factories shall be identified either by permit number(s) or by name, 
city and state. If an intraorganizational announcement involves a 
forthcoming price change or new product which at the time of issuance is 
to remain confidential until a later date, the manufacturer may include 
a statement to this effect on the copy submitted. The copy shall be 
submitted to the Associate Director (Compliance Operations), Attn: 
Industry Control Division, Bureau of Alcohol, Tobacco and Firearms, 
Washington, DC 20226, within five business days after the day issued.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5722))

(Approved by the Office of Management and Budget under Control No. 1512-
0358)

[T.D. 6871, 31 FR 36, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-40, 42 FR 5001, Jan. 26, 1977; T.D. 
ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-307, 55 FR 52743, Dec. 21, 1990; T.D. ATF-424, 64 FR 
71931, Dec. 22, 1999]



Sec. 270.203  Statistical classification of large cigars.

    Large cigars are divided into eight classes for statistical 
purposes, according to the wholesale price or sale price, as applicable. 
The eight classes are as follows:
    (a) Class A. Large cigars with a wholesale price or sale price, as 
applicable of not more than $33.00 per thousand.
    (b) Class B. Large cigars with a wholesale price or sale price, as 
applicable of more than $33.00 per thousand but not more than $51.00 per 
thousand.

[[Page 170]]

    (c) Class C. Large cigars with a wholesale price or sale price as 
applicable of more than $51.00 per thousand but not more than $66.00 per 
thousand.
    (d) Class D. Large cigars with a wholesale price or sale price as 
applicable of more than $66.00 per thousand but not more than $105.00 
per thousand.
    (e) Class E. Large cigars with a wholesale price or sale price, as 
applicable of more than $105.00 per thousand but not more than $120.00 
per thousand.
    (f) Class F. Large cigars with a wholesale price or sale price as 
applicable of more than $120.00 per thousand but not more than $154.00 
per thousand.
    (g) Class G. Large cigars with a wholesale price or sale price as 
applicable of more than $154.00 per thousand but not more than $235.294 
per thousand, and
    (h) Class H. Large cigars with a wholesale price or sale price as 
applicable of more than $235.294 per thousand.

[T.D. ATF-40, 42 FR 5002, Jan. 26, 1977, as amended by T.D. ATF-307, 55 
FR 52743, Dec. 21, 1990]

                                Packages



Sec. 270.211  Package.

    All tobacco products shall, before removal subject to tax, be put up 
by the manufacturer in packages which shall be of such construction as 
will securely contain the products therein and maintain the mark and the 
notice thereon as required by this part. No package of tobacco products 
shall have contained therein, attached thereto, or stamped, marked, 
written, or printed thereon (a) any certificate, coupon, or other device 
purporting to be or to represent a ticket, chance, share, or an interest 
in, or dependent on, the event of a lottery, (b) any indecent or immoral 
picture, print, or representation, or (c) any statement or indication 
that United States tax has been paid.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 36, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28081, Aug. 5, 1986 T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 270.212  Mark.

    Every package of tobacco products packaged in a domestic factory 
shall, before removal subject to tax, have adequately imprinted thereon, 
or on a label securely affixed thereto, a mark as specified in this 
section. The mark may consist of the name of the manufacturer removing 
the product subject to tax and the location (by city and State) of the 
factory from which the products are to be so removed, or may consist of 
the permit number of the factory from which the products are to be so 
removed. (Any trade name of the manufacturer approved as provided in 
Sec. 270.65 may be used in the mark as the name of the manufacturer.) As 
an alternative, where tobacco products are packaged and removed subject 
to tax by the same manufacturer, either at the same or different 
factories, the mark may consist of the name of such manufacturer if the 
factory where packaged is identified on or in the package by a means 
approved by the Director. Before using the alternative, the manufacturer 
shall notify the Director in writing of the name to be used as the name 
of the manufacturer and the means to be used for identifying the factory 
where packaged. If approved by him the Director shall return approved 
copies of the notice to the manufacturer. A copy of the approved notice 
shall be retained as part of the factory records at each of the 
factories operated by the manufacturer.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 36, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 52 FR 
43194, Dec. 1, 1986]



Sec. 270.213  Tobacco products labeled for export.

    Tobacco products labeled for export are ineligible for removal from 
the factory and distribution into the domestic U.S. market. Such 
products may only be sold, transferred or delivered onto the domestic 
U.S. market by a manufacturer of tobacco products after repackaging of 
the product. For the purposes of this section, ``repackaging'' shall 
mean the removal of the tobacco product from its original package 
bearing the export marks and placement of the product in a new package. 
The new

[[Page 171]]

packages, marks and notices must conform to the requirements of this 
subpart.

[T.D. ATF-421, 64 FR 71924, Dec. 22, 1999]



Sec. 270.214  Notice for cigars.

    Before removal subject to tax, every package of cigars shall have 
adequately imprinted on it, or on a label securely affixed to it--
    (a) The designation ``cigars'';
    (b) The quantity of cigars contained in the package; and
    (c) For small cigars, the classification of the product for tax 
purposes (i.e., either ``small'' or ``little'').

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-80, 46 FR 18310, Mar. 24, 1981]



Sec. 270.215  Notice for cigarettes.

    Every package of cigarettes shall, before removal subject to tax, 
have adequately imprinted thereon, or on a label securely affixed 
thereto, the designation ``cigarettes'', the quantity of such product 
contained therein, and the classification for tax purposes, i.e., for 
small cigarettes, either ``small'' or ``Class A'', and for large 
cigarettes, either ``large'' or ``Class B''.

(72 Stat. 1422; 26 U.S.C. 5723)



Sec. 270.216  Notice for smokeless tobacco.

    (a) Product designation. Every package of chewing tobacco or snuff 
shall, before removal subject to tax, have adequately imprinted thereon, 
or on a label securely affixed thereto, the designation ``chewing 
tobacco'' or ``snuff.'' As an alternative, packages of chewing tobacco 
may be designated ``Tax Class C'', and packages of snuff may be 
designated ``Tax Class M''.
    (b) Product weight. Every package of chewing tobacco or snuff shall, 
before removal subject to tax, have adequately imprinted thereon, or on 
a label securely affixed thereto, a clear statement of the actual pounds 
and ounces of the product contained therein. As an alternative, the 
shipping cases containing packages of chewing tobacco or snuff may, 
before removal, have adequately imprinted thereon, or on a label 
securely affixed thereto, a clear statement, in pounds and ounces, of 
the total weight of the product, the tax class of the product, and the 
total number of the packages of product contained therein.

(Approved by the Office of Management and Budget under control number 
1512-0502)

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-243, 51 FR 43194, Dec. 1, 1986, as amended by T.D. ATF-446, 66 
FR 16602, Mar. 27, 2001]



Sec. 270.216a  Notice for pipe tobacco.

    (a) Product designation. Every package of pipe tobacco shall, before 
removal subject to tax, have adequately imprinted thereon, or on a label 
securely affixed thereto, the designation ``pipe tobacco.'' As an 
alternative, packages of pipe tobacco may be designated ``Tax Class L.''
    (b) Product weight. Every package of pipe tobacco shall, before 
removal subject to tax, have adequately imprinted thereon, or on a label 
securely affixed thereto, a clear statement of the actual pounds and 
ounces of the product contained therein.

[T.D. ATF-289, 54 FR 48840, Nov. 27, 1989. Redesignated at T.D. ATF-424, 
64 FR 71931, Dec. 22, 1999]



Sec. 270.216b  Notice for roll-your-own tobacco.

    (a) Product designation. Before removal subject to tax, roll-your-
own tobacco must have adequately imprinted on, or on a label securely 
affixed to, the package, the designation ``roll-your-own tobacco'' or 
``cigarette tobacco'' or ``Tax Class J.''
    (b) Product weight. Before removal subject to tax, roll-your-own 
tobacco must have a clear statement of the actual weight in pounds and 
ounces of the product in the package. This statement must be adequately 
imprinted on, or on a label securely affixed to, the package.

(Approved by the Office of Management and Budget under control number 
1512-0502)

[T.D. ATF-429, 65 FR 57547, Sept. 25, 2000]



Sec. 270.216c  Package use-up rule.

    (a) A manufacturer must have used such packaging for roll-your-own 
tobacco before January 1, 2000.

[[Page 172]]

    (b) A manufacturer of roll-your-own tobacco may continue to place 
roll-your-own tobacco in packages that do not meet the marking 
requirements of Secs. 270.212 and 270.216b(b) until April 1, 2000.
    (c) A manufacturer of roll-your-tobacco may continue to place roll-
your-tobacco in packages that do not meet the requirements of 
Sec. 270.216b(a) until October 1, 2000.

[T.D. ATF-427, 65 FR 40051, June 29, 2000]



Sec. 270.217  Repackaging.

    Where a manufacturer of tobacco products desires to repackage, 
outside the factory, tobacco products on which the tax has been 
determined or which were removed for a tax-exempt purpose or transferred 
in bond to an export warehouse, or to repackage tax determined tobacco 
products in the factory, he shall make application for authorization to 
do so, in duplicate, to the regional director (compliance) for the 
region in which the products are to be repackaged. The application shall 
set forth the location and the number of packages, a description of the 
contents, the tax status of the tobacco products the reason for wanting 
to repackage the products (e.g., packages soiled, damaged, or otherwise 
in a condition making the product unsalable), and a description of the 
package to be used for repackaging. The packages to be used must comply 
with the package, mark, and notice provisions of this chapter applicable 
to the tobacco products being repackaged. The operations authorized 
under this section are limited solely to repackaging for good cause by a 
manufacturer, pursuant to an approved application, of the specified 
tobacco products in the described packages, and do not include any 
manufacturing processes. If the regional director (compliance) approves 
the application, he may assign an ATF officer to supervise the 
repackaging or he may authorize the manufacturer to repackage the 
products without supervision by so stating on a copy of the application 
returned to the manufacturer. Where the manufacturer is authorized to 
repackage he shall record the date of repackaging on the approved 
application and retain it as part of his records.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 36, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                Exemption From Taxes on Tobacco Products



Sec. 270.231  Consumption by employees.

    A manufacturer of tobacco products may gratuitously furnish tobacco 
products, without determination and payment of tax, for personal 
consumption by employees in the factory in such quantities as desired. 
Each employee may also be gratuitously furnished by the manufacturer, 
for off-factory personal consumption, not more than 5 large cigars or 
cigarettes, 20 small cigars or cigarettes, or one retail package of 
chewing tobacco, snuff, pipe tobacco or roll-your-own tobacco, or a 
proportionate quantity of each, without determination and payment of 
tax, on each day the employee is at work. For the purposes of this 
section, the term ``employee'' shall mean those persons whose duties 
require their presence in the factory of whose duties relate to the 
manufacture, distribution, or sale of tobacco products and who receive 
compensation from the manufacturer, or a parent, subsidiary, or 
auxiliary company or corporation of the manufacturer. Such product 
furnished for off-factory consumption shall be furnished to the employee 
within the factory and taken from the factory by the employee on the day 
for which furnished. Employees shall not sell, offer for sale, or give 
away products so furnished.

[T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48840, Nov. 27, 1989; 
T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 270.232  Experimental purposes.

    A manufacturer of tobacco products may use tobacco products without 
determination and payment of tax, for experimental (including testing) 
purposes in his factory, in such quantities

[[Page 173]]

as desired. When authorized by the regional director (compliance) a 
manufacturer may also remove tobacco products in bond, for experimental 
(including testing) purposes outside his factory. Removal of tobacco 
products under this section will be authorized only for bona fide 
experimental purposes, such as for use by producers of machines designed 
to package such products for testing and experimenting in the operation 
of these machines, or for use in laboratories, hospitals, medical 
centers, institutes, colleges, and universities, for scientific, 
technical, or medical research. Tobacco products may not be removed, 
under this section, for such purposes as advertising, salesmen's or 
customers' samples, or for consumer testing. An application to the 
regional director (compliance) for authorization to remove tobacco 
products in bond for experimental purposes shall be by letter, in 
duplicate, and shall set forth the name and address of the consignee, 
the kind and quantity of tobacco products to be removed, and the 
intended use of the products. The manufacturer shall retain, as part of 
his records, each authorization of the regional director (compliance) 
for such removal of tobacco products.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 270.233  Transfer in bond.

    A manufacturer of tobacco products may transfer tobacco products in 
bond, to the factory of any manufacturer of tobacco products. The 
transfer of tobacco products in bond to the premises of an export 
warehouse proprietor shall be in accordance with the provisions of part 
290 of this chapter. Tobacco products are not eligible for transfer in 
bond to a manufacturer of tobacco products or to an export warehouse 
unless they bear all required marks, labels, or notices.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71924, Dec. 22, 
1999]



Sec. 270.234  Removal for use of the United States.

    The removal of tobacco products in bond, for use of the United 
States, shall be in accordance with the provisions of part 295 of this 
chapter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986]



Sec. 270.235  Removal for export purposes.

    The removal of tobacco products in bond, for shipment to a foreign 
country, Puerto Rico, the Virgin Islands, or a possession of the United 
States, or for consumption beyond the jurisdiction of the internal 
revenue laws of the United States, shall be in accordance with the 
provisions of part 290 of this chapter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 270.236  Release from customs custody.

    The release of tobacco products from customs custody, in bond, for 
transfer to the premises of a tobacco products factory, shall be in 
accordance with the provisions of part 275 of this chapter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

[[Page 174]]

              Other Provisions Relating to Tobacco Products



Sec. 270.251  Emergency storage.

    In cases of emergency, the regional director (compliance) may 
authorize, for a stated period, the temporary storage of tobacco 
products at a place outside the factory without the application for 
amended permit required under Sec. 270.114, where such action will not 
hinder the effective administration of this part, is not contrary to 
law, and will not jeopardize the revenue. Application for authorization 
to so store tobacco products shall be submitted to the regional director 
(compliance) by letter, in duplicate. All tobacco products so stored 
outside the factory shall be accounted for in the records and reports 
required under Secs. 270.183 and 270.202 the same as products within the 
factory.

(72 Stat. 1422, 1423, as amended; 26 U.S.C. 5722, 5741)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986]



Sec. 270.252  Reduction of tobacco products to materials.

    A manufacturer may reduce tobacco products to materials without 
supervision. If the tobacco products have been entered in the factory 
record as manufactured or received, an entry shall be made in such 
record of the quantity of pipe tobacco or roll-your-own tobacco and the 
kind and quantity of cigars, cigarettes, and smokeless tobacco reduced 
to materials and of the quantity of tobacco resulting from the 
reduction. Where the manufacturer intends to file claims for credit 
allowance, or refund of tax on such tobacco products, he shall comply 
with the provisions of Secs. 270.311 and 270.313.

[T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48840, Nov. 27, 1989; 
T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 270.253  Destruction.

    When a manufacturer of tobacco products desires to destroy tobacco 
products which have been entered in the factory record as manufactured 
or received, without salvaging the tobacco, he shall notify the regional 
director (compliance) by letter, in duplicate, of the kind and quantity 
of tobacco products to be destroyed, the intended method of destruction, 
and the date on which he desires to destroy such products. The regional 
director (compliance) may assign an ATF officer to supervise destruction 
of the tobacco products or he may authorize the manufacturer to destroy 
such products without supervision by so stating on a copy of the 
manufacturer's notice returned to the manufacturer. When so authorized 
by the regional director (compliance), the manufacturer shall destroy 
the tobacco products by burning completely or by rendering them unfit 
for consumption. Upon completion of the destruction, the manufacturer 
shall make an entry of such destruction in his factory record, and where 
destruction without supervision is authorized, shall record the date and 
method of destruction on the notice returned to him by the regional 
director (compliance), which notice the manufacturer shall retain. Where 
the manufacturer intends to file claim for credit, allowance, or refund 
of tax on such products he shall comply with the provisions of 
Secs. 270.311 and 270.313.

(72 Stat. 1423, as amended; 26 U.S.C. 5741)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 270.254  Receipt into factory.

    A manufacturer of tobacco products may receive in bond into his 
factory tobacco products and may also receive into his factory tobacco 
products on which the tax has been determined (including products on 
which the tax has been paid). Cigars and cigarettes on which the tax has 
been determined which are so received shall be segregated and identified 
as products on which the tax has been determined. If tax determined 
products received into the factory are so handled that they cannot be 
identified both physically and in the records as tax determined products 
they shall be accounted for as returned to bond and upon subsequent 
removal shall be tax determined.

[[Page 175]]

Where returned tax determined tobacco products are to be repackaged 
without being returned to bond the manufacturer shall make application 
for authorization to do so to the regional director (compliance) in 
accordance with Sec. 270.217. Where the manufacturer intends to file 
claim for credit, allowance, or refund of tax on tax determined products 
he shall comply with the provisions of Secs. 270.311 and 270.313.

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 52 FR 43194, Dec. 1, 1986]



Sec. 270.255  Shortages and overages in inventory.

    Whenever a manufacturer of tobacco products makes a physical 
inventory of packaged tobacco products in bond, either as part of normal 
operations or when required by an ATF officer, and such inventory 
discloses a shortage or overage in such products by kind as recorded and 
reported (i.e., small cigars, large cigars, chewing tobacco, snuff, pipe 
tobacco, or roll-your-own tobacco), the manufacturer shall enter such 
shortage or overage in the records required by Sec. 270.183. Shortages 
or overages in inventories made at different times may not be used to 
offset each other, but shall be recorded and reported separately. Unless 
the manufacturer establishes that a shortage was not caused by a removal 
subject to the tax the manufacturer shall determine the tax on any 
shortage, make an adjustment in Schedule A of his next semimonthly tax 
return and pay the tax thereon. If, after paying the tax on a shortage, 
the manufacturer satisfactorily establishes that the shortage was not 
caused by a removal subject to tax, then such payment would be an 
overpayment of tax which the manufacturer may recover as provided in 
Sec. 270.286. Where the manufacturer can establish prior to paying the 
tax on a shortage, that the shortage was not the result of a removal 
subject to tax he shall submit an explanation of such shortage with his 
report for the month in which the shortage was disclosed and, if 
appropriate, he may file claim for remission of tax liability as 
provided in Sec. 270.287. When an overage is disclosed which the 
manufacturer can explain, he shall include such explanation in his 
monthly report and refund of any overpayment may be recovered as 
provided in Sec. 270.286. Whenever a physical inventory discloses a 
shortage or overage of tobacco products which have not been packaged the 
manufacturer shall appropriately enter such shortage or overage in his 
records and shall, at the time required by the Regional Director 
(Compliance), furnish an explanation in the form of a claim for 
remission of tax liability as provided in Sec. 270.287. The manufacturer 
shall pay the tax on any shortage or portion thereof for which he is 
unable to furnish an explanation acceptable to the Regional Director 
(Compliance).

[T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48840, Nov. 27, 1989; 
T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



                   Subpart I--Claims by Manufacturers

                                 General



Sec. 270.281  Abatement of assessment.

    A claim for abatement of the unpaid portion of the assessment of any 
tax on tobacco products or any liability in respect thereof, may be 
allowed to the extent that such assessment is excessive in amount, is 
assessed after expiration of the applicable period of limitation, or is 
erroneously or illegally assessed. Any claim under this section shall be 
prepared on Form 2635 (5620.8), in duplicate, and shall set forth the 
particulars under which the claim is filed. The original of the claim, 
accompanied by such evidence as is necessary to establish to the 
satisfaction of the regional director (compliance) that the claim is 
valid, shall be filed with the regional director (compliance) for the 
region in which the tax or liability was assessed, and the duplicate of 
the claim shall be retained by the manufacturer.

(68A Stat. 792; 26 U.S.C. 6404)

[T.D. 6871, 31 FR 38, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19340, May 22, 
1987]

[[Page 176]]



Sec. 270.282  Allowance of tax.

    Relief from the payment of tax on tobacco products may be extended 
to a manufacturer by allowance of the tax where the tobacco products 
after removal from the factory upon determination of tax and prior to 
the payment of such tax, are lost (otherwise than by theft) or 
destroyed, by fire, casualty, or act of God, while in the possession or 
ownership of the manufacturer who removed such products, or are 
withdrawn by him from the market. Any claim for allowance under this 
section shall be filed on Form 2635, in duplicate, with the regional 
director (compliance) for the region in which the products were removed, 
and shall show the date the tobacco products were removed from the 
factory. A claim relating to products lost or destroyed shall be 
supported as prescribed in Sec. 270.301. In the case of a claim relating 
to tobacco products withdrawn from the market the schedule prescribed in 
Sec. 270.311 shall be filed with the regional director (compliance) for 
the region in which the products are assembled. The manufacturer may not 
anticipate allowance of his claim by making the adjusting entry in a tax 
return pending consideration and action on the claim. Tobacco products 
to which such a claim relates must be shown as removed on determination 
of tax in the return covering the period during which such products were 
so removed. Upon action on the claim by the regional director 
(compliance) he will return the copy of Form 2635 to the manufacturer as 
notice of such action, which copy, with the copy of any verified 
supporting schedules, shall be retained by the manufacturer. When such 
notification of allowance of the claim or any part thereof is received 
prior to the time the return covering the tax on the tobacco products to 
which the claim relates is to be filed, the manufacturer may make an 
adjusting entry and explanatory statement in that tax return. Where the 
notice of allowance is received after the filing of the return and 
taxpayment of the tobacco products to which the claim relates, the 
manufacturer may make an adjusting entry and explanatory statement in 
the next tax return(s) to the extent necessary to take credit in the 
amount of the allowance.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6961, 33 FR 9488, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 270.283  Credit or refund of tax.

    The taxes paid on tobacco products may be credited or refunded 
(without interest) to a manufacturer on proof satisfactory to the 
regional director (compliance) that the claimant manufacturer paid the 
tax on tobacco products lost (otherwise than by theft) or destroyed, by 
fire, casualty, or act of God, while in the possession or ownership of 
such manufacturer, or withdrawn by him from the market. Any claim for 
credit or refund under this section shall be prepared on Form 2635 
(5620.8), in duplicate. Claims shall include a statement that the tax 
imposed on tobacco products by 26 U.S.C. 7652 or chapter 52, was paid in 
respect to the tobacco products covered by the claim, and that the 
products were lost, destroyed, or withdrawn from the market within 6 
months preceding the date the claim is filed. A claim for credit or 
refund relating to products lost or destroyed shall be supported as 
prescribed in Sec. 270.301, and a claim relating to products withdrawn 
from the market shall be accompanied by a schedule prepared and verified 
as prescribed in Secs. 270.311 and 270.313. The original and one copy of 
Form 2635 (5620.8), claim for credit, or the original of Form 2635 
(5620.8), claim for refund, shall be filed with the regional director 
(compliance) for the region in which the tax was paid, or where the tax 
was paid in more than one region with the regional director (compliance) 
for any one of the regions in which the tax was paid. Upon action by the 
regional director (compliance) on a claim for credit he will return the 
copy of Form 2635 to the manufacturer as notification of allowance or 
disallowance of the claim or any part thereof, which copy, with the copy 
of any verified supporting schedules, shall be retained by the 
manufacturer. When the manufacturer is notified of allowance of the 
claim for credit or any part thereof he shall make an

[[Page 177]]

adjusting entry and explanatory statement in the next tax return(s) to 
the extent necessary to take credit in the amount of the allowance. 
Prior to consideration and action on his claim the manufacturer may not 
anticipate allowance of his claim by taking credit in his tax return. 
The duplicate of a claim for refund, with the copy of any verified 
supporting schedules, shall be retained by the manufacturer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1419)

[T.D. 6961, 33 FR 9489, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-219, 50 FR 51389, Dec. 17, 1985; T.D. ATF-232, 51 FR 28083, Aug. 5, 
1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 
19340, May 22, 1987]



Sec. 270.284  Remission of tax liability.

    Remission of the tax liability on tobacco products may be extended 
to the manufacturer liable for the tax where tobacco products in bond 
are lost (otherwise than by theft) or destroyed, by fire, casualty, or 
act of God, while in the possession or ownership of such manufacturer. 
Where tobacco products are so lost or destroyed the manufacturer shall 
report promptly such fact, and the circumstances, to the regional 
director (compliance) for the region in which the factory is located. If 
the manufacturer wishes to be relieved of the tax liability thereon he 
shall also prepare a claim on Form 2635, in duplicate, setting forth the 
nature, date, place, and extent of the loss or destruction. Both copies 
of the claim, accompanied by such evidence as is necessary to establish 
to the satisfaction of the regional director (compliance) that the claim 
is valid, shall be filed with the regional director (compliance) for the 
region in which the factory is located. Upon action on the claim by the 
regional director (compliance) he will return the copy of Form 2635 to 
the manufacturer as notice of such action, which copy shall be retained 
by the manufacturer.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6961, 33 FR 9489, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 270.285  [Reserved]



Sec. 270.286  Refund of overpayment.

    Where an error in computation of the quantity of tobacco products or 
in computation of the amount of tax due results in an overpayment and 
such error is specifically identified and supported by records, the 
manufacturer may file claim for refund or may make an adjustment in his 
semimonthly tax return as provided in Sec. 270.164. (Section 6511, 26 
U.S.C., provides that, in most cases, any adjustment of claim for refund 
of an overpayment of tax on tobacco products must be made or filed 
within three years after the tax is paid.) If the manufacturer elects to 
file a claim for refund of an overpayment resulting from such a 
computational error, he shall do so on Form 2635 (5620.8), in duplicate. 
The original shall be filed with the regional director (compliance) for 
the region in which the tax was paid, and the duplicate retained by the 
manufacturer. Where an overpayment of tax on tobacco products results 
from other than a computational error any claim for refund or credit 
shall be made in accordance with subpart A of part 296 of this chapter.

(68A Stat. 791, 72 Stat. 9; 26 U.S.C. 6402, 6423)

[T.D. 6871, 31 FR 39, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-251, 52 FR 19340, May 22, 1987]



Sec. 270.287  Remission of tax liability on shortage.

    Whenever a manufacturer of tobacco products desires to submit a 
claim for remission of tax liability on shortages of tobacco products in 
bond, disclosed by physical inventory as set forth in Sec. 270.255, he 
shall prepare such claim on Form 2635, in duplicate. Both copies of the 
claim shall be filed with the regional director (compliance) for the 
region in which the factory is located. The claim shall specify the 
quantities of tobacco products on which claim is made and the tax 
liability in respect thereof, and shall set forth the circumstances 
surrounding the shortage

[[Page 178]]

and the reason the manufacturer believes tax is not due or payable. The 
regional director (compliance) will, after such investigation as he 
deems appropriate, allow the claim to the extent he is satisfied the 
shortage was due to operating losses such as damage during grading, 
sorting, or packaging, and was not caused by theft or other unlawful or 
improper removal. Upon action on the claim by the regional director 
(compliance) he will return the copy of Form 2635 to the manufacturer as 
notice of such action, which copy shall be retained by the manufacturer.

(72 Stat. 1414, as amended, 1417, 1419, as amended; 26 U.S.C. 5701, 
5703, 5705)

[T.D. 6961, 33 FR 9489, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                   Tobacco Products Lost or Destroyed



Sec. 270.301  Action by claimant.

    Where tobacco products are lost (otherwise than by theft) or 
destroyed, by fire, casualty, or act of God, and the manufacturer 
desires to file a claim for the tax on such products under the 
provisions of Sec. 270.282 or Sec. 270.283, he shall indicate on the 
claim the nature, date, place, and extent of such loss or destruction. 
The claim shall be accompanied by such evidence as is necessary to 
establish to the satisfaction of the regional director (compliance) that 
the claim is valid.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6871, 31 FR 39, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 52 FR 43194, Dec. 1, 1986]

               Tobacco Products Withdrawn From the Market



Sec. 270.311  Action by claimant.

    (a) General. Where tobacco products are withdrawn from the market 
and the manufacturer desires to file claim under the provisions of 
Sec. 270.282 or Sec. 270.283, he shall assemble the products in or 
adjacent to a factory if they are to be returned to bond or at any 
suitable place if they are to be destroyed or reduced to materials. The 
manufacturer shall group the products according to the rates of tax 
applicable to the products, and shall prepare a schedule of the 
products, on ATF Form 5200.7, in triplicate. All copies of the schedule 
shall be forwarded to the regional director (compliance) for the region 
in which the products are assembled.
    (b) Large cigars. Refund or credit of tax on large cigars withdrawn 
from the market is limited to the lowest tax paid on that brand and size 
of cigar during the required record retention period (see Sec. 270.185), 
except where the manufacturer establishes that a greater amount was 
actually paid. For each claim involving large cigars withdrawn from the 
market, the manufacturer must include a certification on either Form 
5200.7 or Form 2635 (5620.8) to read as follows:

    The amounts claimed relating to large cigars are based on the lowest 
sale price applicable to the cigars during the required record retention 
period, except where specific documentation is submitted with the claim 
to establish that any greater amount of tax claimed was actually paid.


(See 26 U.S.C. 5705)

[T.D. ATF-80, 46 FR 18310, Mar. 24, 1981, as amended by T.D. ATF-232, 51 
FR 28083, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-251, 52 FR 19340, May 22, 1987; T.D. ATF-307, 55 FR 52743, Dec. 21, 
1990; T.D. ATF-424, 64 FR 71932, Dec. 22, 1999; T.D. ATF-420, 64 FR 
71941, Dec. 22, 1999]



Sec. 270.312  Action by regional director (compliance).

    Upon receipt of a schedule of tobacco products withdrawn from the 
market, the regional director (compliance) may assign an ATF officer to 
verify the schedule and supervise disposition of the tobacco products 
(and destruction of the stamps, if any), or he may authorize the 
manufacturer to dispose of the products (and destroy the stamps, if any) 
without supervision by so stating on the original and one copy of the 
schedule returned to the manufacturer.

[T.D. 6871, 31 FR 39, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

[[Page 179]]



Sec. 270.313  Disposition of tobacco products and schedule.

    When so authorized, as evidenced by the regional director's 
(compliance) statement on the schedule, the manufacturer shall dispose 
of the tobacco products (and destroy the stamps, if any) as specified in 
the schedule. After the manufacturer has disposed of the products (and 
destroyed the stamps, if any), he shall execute a certificate on both 
copies of the schedule returned to him by the regional director 
(compliance), to show the disposition and the date of disposition of the 
products (and stamps, if any). In connection with a claim for allowance 
the manufacturer then shall return the original of the schedule to the 
regional director (compliance) who authorized such disposition, who will 
cause such schedule to be associated with the claim, Form 2635 (5620.8), 
filed under Sec. 270.282. In connection with a claim for credit or 
refund the manufacturer shall attach the original of the schedule to his 
claim for credit, Form 2635 (5620.8), or claim for refund, Form 2635 
(5620.8), filed under Sec. 270.283. When an ATF officer is assigned to 
verify the schedule and supervise disposition of the tobacco products, 
such officer shall, upon completion of his assignment, execute a 
certificate on all copies of the schedule to show the disposition and 
the date of disposition of the products. In connection with a claim for 
allowance the officer shall return one copy of the schedule to be 
included in the manufacturers records, and in connection with a claim 
for credit or refund, the officer shall return the original and one copy 
of the schedule to the manufacturer, the original of which the 
manufacturer shall attach to the claim, Form 2635 (5620.8), filed under 
Sec. 270.283.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6871, 31 FR 39, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19340, May 22, 
1987]



 Subpart J--Suspension and Discontinuance of Operations by Manufacturers



Sec. 270.331  Discontinuance of operations.

    Every manufacturer of tobacco products who desires to discontinue 
operations under this part shall dispose of all tobacco products on 
hand, in accordance with this part, and make a concluding inventory and 
concluding report in accordance with the provisions of Sec. 270.201 and 
Sec. 270.202, respectively. The manufacturer shall surrender his permit, 
with such inventory and report, to the regional director (compliance) as 
notice of such discontinuance. The regional director (compliance) may 
then terminate the liability of the surety on the bond of the 
manufacturer.

(72 Stat. 1422; 26 U.S.C. 5721, 5722)

[T.D. 6871, 37 FR 40, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 270.332  Suspension and revocation of permit.

    Where the regional director (compliance) has reason to believe that 
a manufacturer of tobacco products has not in good faith complied with 
the provisions of 26 U.S.C. chapter 52, and regulations thereunder, or 
with any other provision of 26 U.S.C. with intent to defraud, or has 
violated any condition of his permit, or has failed to disclose any 
material information required or made any material false statement in 
the application for the permit, or has failed to maintain his premises 
in such manner as to protect the revenue, the regional director 
(compliance) shall issue an order, stating the facts charged, citing 
such person to show cause why his permit should not be suspended or 
revoked. Such citation shall be issued and opportunity for hearing 
afforded in accordance with part 200 of this chapter, which part is 
applicable to such proceedings. If the hearing examiner, or on appeal, 
the Director, decides the

[[Page 180]]

permit should be suspended or revoked, the regional director 
(compliance) shall by order give effect to such decision.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5713))

[26 FR 8174, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979]



          Subpart K--Manufacture of Cigarette Papers and Tubes

    Source: T.D. ATF-384, 61 FR 54085, Oct. 17, 1996, unless otherwise 
noted.

                                  Taxes



Sec. 270.351  Cigarette papers.

    Cigarette papers are taxed at the following rates under 26 U.S.C. 
5701(c):

------------------------------------------------------------------------
                                    Tax rate for each 50 papers \1\ for
                                         removals during the years:
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                     1999 \2\       2001        after
------------------------------------------------------------------------
Cigarette papers up to 6\1/2\"         $0.0075      $0.0106      $0.0122
 long............................
Cigarette papers over 6\1/2\"
 long............................   Use rates above, but count each 2\3/
                                     4\ inches, or fraction thereof, of
                                    the length of each as one cigarette
                                                   paper.
------------------------------------------------------------------------
\1\ Tax rate for less than 50 papers is the same. The tax is not
  prorated.
\2\ Before January 1, 2000, books or sets containing 25 papers or less
  were not taxable. On and after January 1, 2000, all cigarette papers
  are taxable.


(72 Stat. 1414; 26 U.S.C. 5701)

[T.D. ATF-420, 64 FR 71941, Dec. 22, 1999]



Sec. 270.352  Cigarette tubes.

    Cigarette tubes are taxed at the following rates under 26 U.S.C. 
5701(d):

------------------------------------------------------------------------
                                      Tax rate for each 50 tubes* for
                                         removals during the years
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Cigarette tubes up to 6\1/2\"           $0.015      $0.0213      $0.0244
 long............................
Cigarette tubes over 6\1/2\" long   Use rates above, but count each 2\3/
                                     4\ inches, or fraction thereof, of
                                    the length of each as one cigarette
                                                   tube.
------------------------------------------------------------------------
*Tax rate for less than 50 tubes is the same. The tax is not prorated.


(72 Stat. 1414; 26 U.S.C. 5701)

[T.D. ATF-420, 64 FR 71941, Dec. 22, 1999]



Sec. 270.353  Persons liable for tax.

    The manufacturer of cigarette papers and tubes shall be liable for 
the taxes imposed on such articles by 26 U.S.C. 5701. When a 
manufacturer of cigarette papers and tubes transfers such papers and 
tubes without payment of tax, pursuant to 26 U.S.C. 5704 to the bonded 
premises of another such manufacturer, a manufacturer of tobacco 
products, or an export warehouse proprietor, the transferee shall become 
liable for the tax upon receipt of such papers and tubes and the 
transferor shall thereupon be relieved of liability for the tax. When 
cigarette papers and tubes are released in bond from customs custody for 
transfer to the bonded premises of a manufacturer of such papers and 
tubes or a manufacturer of tobacco products, the transferee shall become 
liable for the tax on the papers and tubes upon release from customs 
custody. Any person who possesses cigarette papers and tubes in 
violation of 26 U.S.C. 5751(a) (1) or (2), shall be liable for a tax 
equal to the rate of tax applicable to such articles.

(72 Stat. 1417, 1424; 26 U.S.C. 5703, 5751)



Sec. 270.354  Determination of tax and method of payment.

    Except for removals without payment of tax and transfers in bond, as 
authorized by law, no cigarette papers and tubes shall be removed until 
the taxes imposed by section 5701, I.R.C.,

[[Page 181]]

have been determined. The payment of taxes on cigarette papers and tubes 
which are removed on determination of tax shall be made by return in 
accordance with the provisions of this subpart.

(72 Stat. 1417; 26 U.S.C. 5703)



Sec. 270.355  Return of manufacturer.

    (a) Requirement for filing. A manufacturer of cigarette papers and 
tubes shall file, for each factory, a semimonthly tax return on ATF Form 
5000.24. A return shall be filed for each semimonthly return period 
regardless of whether cigarette papers and tubes were removed subject to 
tax or whether tax is due for that particular return period.
    (b) Waiver from filing. The manufacturer need not file a return for 
each semimonthly return period if:
    (1) Cigarette papers and tubes were not removed subject to tax 
during the period, and
    (2) The regional director (compliance) has granted a waiver from 
filing in response to a written request from the manufacturer.
    (c) Semimonthly return periods. Except as provided by paragraph (g) 
of this section, semimonthly return periods shall run from the first day 
of the month through the 15th day of the month, and from the 16th day of 
the month through the last day of the month.
    (d) Preparation and filing. The return shall be executed and filed 
with ATF in accordance with the instructions on the form.
    (e) Remittance of tax. Except as provided in Sec. 270.357, 
remittance of the tax, if any, shall accompany the return.
    (f) Time for filing. Except as provided by paragraph (g) of this 
section, for each semimonthly return period, the return shall be filed 
not later than the 14th day after the last day of the return period. If 
the due date falls on a Saturday, Sunday, or legal holiday, the return 
and remittance shall be due on the immediately preceding day which is 
not a Saturday, Sunday or legal holiday.
    (g) Special rule for taxes due for the month of September (effective 
after December 31, 1994). (1) Except as provided in paragraph (g)(2) of 
this section, the second semimonthly period for the month of September 
shall be divided into two payment periods, from the 16th day through the 
26th day, and from the 27th day through the 30th day. The manufacturer 
shall file a return on Form 5000.24, and make remittance, for the period 
September 16-26, no later than September 29. The manufacturer shall file 
a return on Form 5000.24, and make remittance, for the period September 
27-30, no later than October 14.
    (2) Taxpayment not by electronic fund transfer. In the case of taxes 
not required to be remitted by electronic fund transfer as prescribed by 
Sec. 270.357, the second semimonthly period of September shall be 
divided into two payment periods, from the 16th day through the 25th 
day, and the 26th day through the 30th day. The manufacturer shall file 
a return on Form 5000.24, and remittance, for the period September 16-
25, no later than September 28. The manufacturer shall file a return on 
Form 5000.24, and make remittance, for the period September 26-30, no 
later than October 14.
    (3) Amount of payment: Safe harbor rule. (i) Taxpayers are 
considered to have met the requirements of paragraph (g)(1) of this 
section, if the amount paid no later than September 29 is not less than 
\11/15\ (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (ii) Taxpayers are considered to have met the requirements of 
paragraph (g)(2) of this section, if the amount paid no later than 
September 28 is not less than two-thirds (66.7 percent) of the tax 
liability incurred for the semimonthly period beginning on September 1 
and ending on September 15, and if any underpayment of tax is paid by 
October 14.
    (4) Last day for payment. If the required due date for taxpayment 
for the periods September 16-25 or September 16-26, as applicable, falls 
on a Saturday, the return and remittance shall be due on the immediately 
preceding day.

[[Page 182]]

If the required due date falls on a Sunday, the return and remittance 
shall be due on the immediately following day.

(Approved by the Office of Management and Budget under Control Number 
1512-0467)



Sec. 270.356  Adjustments in the return of manufacturer.

    Adjustments may be made in Schedules A and B of the manufacturer's 
semimonthly tax return, ATF Form 5000.24, as provided in this section. 
Schedule A of the return will be used where an unintentional error in a 
previous return resulted in an underpayment of tax. Schedule B of the 
return will be used where an unintentional error in a previous return 
resulted in an overpayment of tax, or where notice has been received 
from the regional director (compliance) that a claim for allowance of 
tax has been approved. In the case of an overpayment, the manufacturer 
shall have the option of filing a claim on ATF Form 2635 (5620.8) for 
refund or taking credit in Schedule B of the return, both subject to the 
period of limitations prescribed in 26 U.S.C. 6511. Any adjustment made 
in a return must be fully explained in the appropriate schedule or in a 
statement attached to and made a part of the return in which such 
adjustment is made.

(72 Stat. 1417, 68A Stat. 791; 26 U.S.C. 5703, 6402)



Sec. 270.357  Payment of tax by electronic fund transfer.

    (a) General. (1) Each taxpayer who was liable, during a calendar 
year, for a gross amount equal to or exceeding five millions dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes 
combining tax liabilities incurred under this part and part 275 of this 
chapter, shall use a commercial bank in making payment by electronic 
fund transfer (EFT) of taxes on tobacco products, cigarette papers, and 
cigarette tubes during the succeeding calendar year. Payment of taxes on 
tobacco products, cigarette papers, and cigarette tubes in any other 
form of remittance, as authorized in Sec. 270.355, is not authorized for 
a taxpayer who is required, by this section, to make remittances by EFT. 
For purposes of this section, the dollar amount of tax liability is 
defined as the gross tax liability on all taxable withdrawals and 
importations (including tobacco products, cigarette papers, and 
cigarette tubes brought into the United States from Puerto Rico or the 
Virgin Islands) during the calendar year, without regard to any 
drawbacks, credits, or refunds, for all premises from which such 
activities are conducted by the taxpayer. Overpayments are not taken 
into account in summarizing the gross tax liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR Secs. 1.563-1 through 1.1563-4. Also, 
the rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (3) A taxpayer who is required by this section to make remittances 
by EFT shall make a separate EFT remittance and file a separate return, 
ATF Form 5000.24, for each factory from which cigarette papers or 
cigarette tubes are withdrawn upon determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the tax by EFT, each taxpayer 
who was liable for a gross amount equal to or exceeding five million 
dollars in taxes on tobacco products, cigarette papers, and cigarette 
tubes combining tax liabilities incurred under this part and part 275 of 
this chapter during the previous calendar year, shall notify, in 
writing, the regional director (compliance), for each region in which 
taxes are paid. The notice shall be an agreement to make remittances by 
EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the taxpayment to the Department of the Treasury's General 
Account or the Federal Reserve Bank of New York

[[Page 183]]

as provided in paragraph (e) of this section. The request shall be made 
to the bank early enough for the transfer to be made to the Treasury 
Account by no later than the close of business on the last day for 
filing the return, prescribed in Sec. 270.355. The request shall take 
into account any time limit established by the bank.
    (3) If a taxpayer was liable for less than five million dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes 
combining tax liabilities incurred under this part and part 275 of this 
chapter during the preceding calendar year, the taxpayer may choose 
either to continue remitting the tax as provided in this section or to 
remit the tax with the return as prescribed by Sec. 270.355. Upon filing 
the first return on which the taxpayer chooses to discontinue remitting 
the tax by EFT and to begin remitting the tax with the tax return, the 
taxpayer shall notify the regional director (compliance) by attaching a 
written notification to ATF Form 5000.24, stating that no taxes are due 
by EFT, because the tax liability during the preceding calendar year was 
less than five million dollars, and that the remittance shall be filed 
with the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the return, ATF Form 
5000.24, information about remitting the tax for that return period by 
EFT and shall file the return with ATF, in accordance with the 
instructions of ATF Form 5000.24.
    (2) Remittances shall be considered as made when the taxpayment by 
EFT is received by the Treasury Account. For purposes of this section, a 
taxpayment by EFT shall be considered as received by the Treasury 
Account when it is paid to a Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an EFT message as 
required by paragraph (b)(2) of this section, any transfer data record 
furnished to the taxpayer, through normal banking procedures, will serve 
as the record of payment, and shall be retained as part of required 
records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5761, 6651, or 6656, as applicable, for 
failure to make a taxpayment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the regional director (compliance) will issue to the 
taxpayer an AFT Procedure entitled Payment of Tax by Electronic Fund 
Transfer. This publication outlines the procedure a taxpayer is to 
follow when preparing returns and EFT remittances in accordance with 
this part. The U.S. Customs Service will provide the taxpayer with 
instructions for preparing EFT remittances for payments to be made to 
the U.S. Customs Service.

(Approved by the Office of Management and Budget under control number 
1512-0457)

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended (26 U.S.C. 5703))



Sec. 270.358  Assessment.

    Whenever any person required by law to pay tax on cigarette papers 
and tubes fails to pay such tax, the tax shall be ascertained and 
assessed against such person, subject to the limitations prescribed in 
26 U.S.C. 6501. The tax so assessed shall be in addition to the 
penalties imposed by law for failure to pay such tax when required. 
Except in cases where delay may jeopardize collection of the tax, or 
where the amount is nominal or the result of an evident mathematical 
error, no such assessment shall be made until and after notice has been 
afforded such person to show cause against assessment. The person will 
be allowed 45 days from the date of such notice to show cause, in 
writing, against such assessment.

(72 Stat. 1417; 26 U.S.C. 5703)



Sec. 270.359  Employer identification number.

    The employer identification number (EIN) (defined at 26 CFR 
301.7701-12) of a manufacturer of cigarette papers and/or tubes who has 
been assigned such a number shall be shown on each semimonthly tax 
return, ATF Form 5000.24, and special tax return (including amended 
returns), ATF Form 5630.5, filed under this subpart. Failure of the 
taxpayer to include the EIN on ATF Form 5000.24 may result in assertion

[[Page 184]]

and collection of the penalty specified in Sec. 70.113 of this chapter. 
Failure of the taxpayer to include the EIN on ATF Form 5630.5 may result 
in the imposition of the penalty specified in 27 CFR 70.113 of this 
chapter.

(75 Stat. 828; 26 U.S.C. 6109, 6676)



Sec. 270.360  Application for employer identification number.

    Each manufacturer of cigarette papers and tubes who has neither 
secured an EIN nor made application therefor shall file an application 
on IRS Form SS-4. IRS Form SS-4 may be obtained from any service center 
director or from any district director. Such application shall be filed 
on or before the seventh day after the date on which any tax return 
under this subpart is filed. Each manufacturer shall make application 
for and shall be assigned only one EIN for all internal revenue 
purposes.

(75 Stat. 828; 26 U.S.C. 6109)



Sec. 270.361  Execution and filing of Form SS-4.

    The application on IRS form SS-4, together with any supplementary 
statement, shall be prepared in accordance with the applicable form, 
instructions, and regulations, and the data called for shall be set 
forth fully and clearly. The application shall be filed with the service 
center director serving the internal revenue district where the 
applicant is required to file returns under this subpart, except that 
hand-carried applications may be filed with the district director of any 
such district as provided for in 26 CFR Sec. 301.6091-1. The application 
shall be signed by:
    (a) The individual if the person is an individual;
    (b) The president, vice president, or other principal officer if the 
person is a corporation;
    (c) A responsible and duly authorized member or officer having 
knowledge of its affairs if the person is a partnership or other 
unincorporated organization; or
    (d) The fiduciary if the person is a trust or estate.

(75 Stat. 828; 26 U.S.C. 6109)

                      Special (Occupational) Taxes



Sec. 270.371  Liability for special tax.

    (a) Manufacturer of cigarette papers and tubes. Every manufacturer 
of cigarette papers and tubes shall pay a special (occupational) tax at 
a rate specified by Sec. 270.372 of this part. The tax shall be paid on 
or before July 1. On commencing business, the tax shall be computed from 
the first day of the month in which liability is incurred, through the 
following June 30. Thereafter, the tax shall be computed for the entire 
year (July 1 through June 30).
    (b) Each place of business taxable. A manufacturer of cigarette 
papers and tubes incurs special tax liability at each place of business 
in which an occupation subject to special tax is conducted. A place of 
business means the entire office, plant or area of the business in any 
one location under the same proprietorship. Passageways, streets, 
highways, rail crossings, waterways, or partitions dividing the premises 
are not sufficient separation to require additional special tax, if the 
divisions of the premises are otherwise contiguous.

(26 U.S.C. 5143, 5731)



Sec. 270.372  Rate of special tax.

    (a) General. Title 26 U.S.C. 5731(a)(2) imposes a special tax of 
$1,000 per year on every manufacturer of cigarette papers and tubes.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5731(b) 
provides for a reduced rate of $500 per year with respect to any 
manufacturer of cigarette papers and tubes whose gross receipts (for the 
most recent taxable year ending before the first day of the taxable 
period to which the special tax imposed by Sec. 270.371 relates) are 
less than $500,000. The ``taxable year'' to be used for determining 
gross receipts is the taxpayer's income tax year. All gross receipts of 
the taxpayer shall be included, not just the gross receipts of the 
business subject to special tax. Proprietors of new businesses that have 
not yet begun a taxable year, as well as proprietors of existing 
businesses that have not yet ended a taxable year, who commence a new 
activity subject to special tax, qualify for the reduced special 
(occupational) tax

[[Page 185]]

rate, unless the business is a member of a ``controlled group''; in that 
case the rules of paragraph (c) of this section shall apply.
    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during such year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5731)



Sec. 270.373  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on ATF Form 5630.5 shall be provided including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Secs. 270.359-361).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: That is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with a permit application, and if the information previously 
provided is still current.
    (c) Multiple locations and/or classes of tax.
    A taxpayer subject to special tax for the same period at more than 
one location or for more than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by State, 
the name, address, and tax class of each location for which special tax 
is being paid. The original of the list shall be filed with ATF in 
accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 270.371.
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any officer. In each case, the

[[Page 186]]

person signing the return shall designate his or her capacity as 
``individual owner,'' ``member of firm,'' or, in the case of a 
corporation, the title of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.



Sec. 270.374  Issuance, distribution, and examination of special tax stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5 together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment required by Sec. 270.373(c)(2), but showing, as to name and 
address, only the name of the taxpayer and the address of the taxpayer's 
principal place of business (or principal office in the case of a 
corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
type on each stamp the address of the business conducted at the location 
for which that stamp is designated. The taxpayer shall then forward each 
stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by ATF officers, 
at the location for which designated, during business hours.

(26 U.S.C. 5142, 5146, 6806)



Sec. 270.375  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on ATF Form 5630.5, the 
manufacturer shall file an amended special tax return as soon as 
practicable after the change, covering the new corporate or firm name, 
or trade names. No new special tax is required to be paid. The 
manufacturer shall attach the special tax stamp for endorsement of the 
change in name.
    (b) Change in proprietorship.--(1) General. If there is a change in 
the proprietorship of a cigarette papers and tubes factory, the 
successor shall pay a new special tax and obtain the required special 
tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on ATF Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which the successor began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The spouse or child, or executor, administrator, or other 
legal representative of the taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);

[[Page 187]]

    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.
    (d) Change in location. If there is a change in location of a 
taxable place of business, the manufacturer shall within 30 days after 
the change, file with ATF an amended special tax return covering the new 
location. The manufacturer shall attach the special tax stamp or stamps 
for endorsement of the change in location. No new special tax is 
required to be paid. However, if the manufacturer does not file the 
amended return within 30 days, the manufacturer is required to pay a new 
special tax and obtain a new special tax stamp.

(26 U.S.C. 5143, 7011)

                                 General



Sec. 270.382  Authority of ATF officers to enter premises.

    Any ATF officer may enter in the daytime any premises where 
cigarette papers and tubes are produced or kept, so far as it may be 
necessary for the purpose of examining such articles. When such premises 
are open at night, any ATF officer may enter them, while so open, in the 
performance of his or her official duties. The owner of such premises, 
or person having the superintendence of the same, who refuses to admit 
any ATF officer or permit any AFT officer to examine such cigarette 
papers and tubes shall be liable to the penalties prescribed by law for 
the offense.

(68A Stat. 872; 903 26 U.S.C. 7342, 7606)



Sec. 270.383  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this subpart, or endeavors to 
intimidate or impede any ATF officer acting in an official capacity, or 
forcibly rescues or attempts to rescue or causes to be rescued any 
property, after it has been duly seized for forfeiture to the United 
States in connection with a violation or intended violation of this 
subpart, shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)



Sec. 270.384  Disposal of forfeited, condemned, and abandoned cigarette papers and tubes.

    Forfeited, condemned, or abandoned cigarette papers or tubes in the 
custody of a Federal, State, or local officer upon which the Federal tax 
has not been paid shall not be sold or caused to be sold for consumption 
in the United States if, in the opinion of the officer, the sale of such 
papers and tubes will not bring a price equal to the tax due and 
payable, and the expenses incident to the sale. Where the cigarette 
papers or tubes are not sold the officer may deliver them to a Federal 
or State institution (if they are fit for consumption) or cause their 
destruction by burning completely or by rendering them unfit for 
consumption. Where such papers or tubes are sold, release by the officer 
having custody shall be made only after such papers and tubes are 
properly packaged and taxpaid. A receipt from the regional director 
(compliance) evidencing payment of tax on such papers or tubes shall be 
presented to the officer having custody of the articles, which tax shall 
be considered part of the sales price. Where cigarette papers or tubes 
which have been packaged under the provisions of part 295 of this 
chapter are to be released after payment of tax, the purchaser shall 
appropriately mark each package ``Federal Tax Paid (date)'' before the 
officer having custody of the papers or tubes releases them. However, 
the articles may be released without such marking of the packages if the 
purchaser is a qualified manufacturer of cigarette papers and tubes and 
does not intend to place such papers or tubes on the domestic market for 
taxable articles but will otherwise dispose of them. A written statement 
of notification of disposal by destruction or return to bond through 
claim for refund, shall be filed, in original only, with the officer 
having custody of the articles. In the case of cigarette papers and 
tubes forfeited under the internal revenue laws, the sale shall be 
subject to

[[Page 188]]

the provisions of part 72 of this chapter.

(68A Stat. 870, as amended, 72 Stat. 1425, as amended; 26 U.S.C. 7325, 
5753)



Sec. 270.385  Alternate methods or procedures.

    A manufacturer of cigarette papers and tubes, on specific approval 
by the Director as provided in this section, may use an alternate method 
or procedure in lieu of a method or procedure specifically prescribed in 
this subpart. The Director may approve an alternate method or procedure, 
subject to stated conditions, when the Director finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure,
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue, and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this subpart.
    No alternate method or procedure relating to the giving of any bond 
or to the assessment, payment, or collection of tax, shall be authorized 
under this section. A manufacturer who desires to employ an alternate 
method or procedure shall submit a written application, in triplicate, 
to the regional director (compliance) for transmittal to the Director. 
The application shall specifically describe the proposed alternate 
method or procedure, and shall set forth the reasons therefor. Alternate 
methods or procedures shall not be employed until the application has 
been approved by the Director. The manufacturer shall, during the period 
of authorization of an alternate method or procedure, comply with the 
terms of the approved application. Authorization for any alternate 
method or procedure may be withdrawn whenever, in the judgment of the 
Director, the revenue is jeopardized or the effective administration of 
this part is hindered. Any authorization of the Director under this 
section shall be retained as part of the manufacturer's record in 
accordance with this subpart.



Sec. 270.386  Emergency variations from requirements.

    The Director may approve methods of operation other than as 
specified in this subpart, where it is determined that an emergency 
exists and the proposed variations from the specified requirements are 
necessary, and the proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications;
    (b) Will not hinder the effective administration of this subpart; 
and
    (c) Will not be contrary to any provision of law. Variations from 
requirements granted under this section are conditioned on compliance 
with the procedures, conditions, and limitations set forth in the 
approval of the application. Failure to comply in good faith with such 
procedures, conditions and limitations shall automatically terminate the 
authority for such variations and the manufacturer thereupon shall fully 
comply with the prescribed requirements of regulations from which the 
variations were authorized. Authority for any variation may be withdrawn 
whenever in the judgment of the Director the revenue is jeopardized or 
the effective administration of this subpart is hindered by the 
continuation of such variation. Where a manufacturer desires to employ 
such variation, the manufacturer shall submit a written application to 
do so (in triplicate) to the regional director (compliance) for 
transmittal to the Director. The application shall describe the proposed 
variations and set forth the reasons therefor. Variations shall not be 
employed until the application has been approved. In accordance with 
this subpart, any authorization of the Director under this section shall 
be retained as part of the manufacturer's records.



Sec. 270.387  Penalties and forfeitures.

    Anyone who fails to comply with the provisions of this subpart 
becomes liable to the civil and criminal penalties, and forfeitures, 
provided by law.

(72 Stat. 1425, 1426; 26 U.S.C. 5761, 5762, 5763)

[[Page 189]]

              Qualification Requirements for Manufacturers

                         Original Qualifications



Sec. 270.391  Persons required to qualify.

    Every person who makes up cigarette paper into books or sets 
containing more than 25 papers each, or into tubes, except for his or 
her own personal use or consumption, shall first qualify as a 
manufacturer of cigarette papers and tubes in accordance with the 
provisions of this subpart.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.392  Bond.

    Every person, before commencing business as a manufacturer of 
cigarette papers and tubes, shall file a bond on ATF Form 2102 (5210.1). 
Such bond shall be filed in accordance with the applicable provisions of 
subpart G of this part and conditioned upon compliance with the 
provisions of 26 U.S.C. Chapter 52, and regulations thereunder, 
including, but not limited to, the timely payment of taxes imposed by 
such chapter and penalties and interest in connection therewith for 
which the manufacturer may become liable to the United States.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.393  Power of attorney.

    If the bond or any other document required under this part is signed 
by an attorney in fact for an individual, partnership, association, 
company, or corporation, by one of the partners for a partnership, or by 
one of the members of an association, a power of attorney on ATF Form 
1534 (5000.8) shall be furnished to the regional director (compliance). 
If such bond or other document is signed on behalf of a corporation by 
an officer thereof, it must be supported by duly authenticated extracts 
of the stockholders' meeting, by-laws, or directors' meeting authorizing 
such officer to execute such document for the corporation. ATF Form 
5000.8 or support of authority does not have to be filed again with a 
regional director (compliance) where such form or support has previously 
been submitted to that regional director (compliance) and is still in 
effect.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.394  Notice of approval of bond.

    If the bond required under this subpart is approved by the regional 
director (compliance), a number will be assigned to the factory of the 
manufacturer of cigarette papers and tubes for internal revenue 
purposes. The regional director (compliance) will immediately notify the 
manufacturer, in writing, of the bond approval, in order that the 
manufacturer may commence operations.

(72 Stat. 1421; 26 U.S.C. 5711)

                  Changes after Original Qualifications



Sec. 270.395  Change in name.

    Where there is a change in the individual, trade, or corporate name 
of a manufacturer of cigarette papers and tubes, the manufacturer shall, 
within 30 days of the change, furnish the regional director (compliance) 
a written notice of such change.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 270.396  Change in proprietorship.

    Where there is to be any change in proprietorship (including a 
change in the identity of the members of a partnership or association, 
but excluding any change in stock ownership in a corporation) of the 
business of a manufacturer of cigarette papers and tubes, the proposed 
successor shall, before commencing operations, qualify as a manufacturer 
of cigarette papers and tubes, in accordance with this part. If such 
manufacturer promptly files the required documentation with the regional 
director (compliance), an administrator, executor, receiver, trustee, 
assignee, or other fiduciary successor may liquidate the business 
without qualifying as a manufacturer. The manufacturer must promptly 
file with the regional director (compliance) a statement of the intent 
to liquidate and furnish a certified copy of the order of the court, or 
other pertinent documents. These documents must

[[Page 190]]

show the appointment and qualification of any administrator, executor, 
receiver, trustee, assignee, or other fiduciary, together with an 
extension of coverage of the predecessor's bond executed by the 
administrator, executor, receiver, trustee, assignee, or other fiduciary 
and the surety, in accordance with the provisions of Sec. 270.407. The 
predecessor shall make a closing inventory and closing report in 
accordance with the provisions of Secs. 270.434 and 270.426, 
respectively, and the successor shall make an opening inventory and 
opening report, in accordance with the provision of Secs. 270.432 and 
270.423, respectively.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5721, and 5722)



Sec. 270.397  Change in location.

    Whenever a manufacturer of cigarette papers and tubes contemplates a 
change in location of a factory within the same region, the manufacturer 
shall, before commencing operations at the new location, file an 
extension of coverage of bond in accordance with the provisions of 
Sec. 270.407. Whenever a manufacturer of cigarette papers and tubes 
contemplates changing the location of a factory to another region, the 
manufacturer shall, before commencing operations at the new location, 
qualify as a manufacturer in the new region, in accordance with the 
applicable provisions of this subpart, and make a closing inventory and 
closing report, in accordance with the provisions of Secs. 270.434 and 
270.426, respectively.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5721, and 5722)

                Bonds and Extensions of Coverage of Bonds



Sec. 270.401  Corporate surety.

    (a) Surety bonds required by this subpart may be given only with 
corporate sureties holding certificates of authority from, and subject 
to any limitations prescribed by the Secretary of the Treasury as set 
forth in the current revision of Treasury Department Circular No. 570 
(Companies Holding Certificates of Authority as Acceptable Sureties on 
Federal Bonds and as Acceptable Reinsuring Companies). The surety shall 
have no interest whatever in the business covered by the bond.
    (b) Each bond and each extension of coverage of bond shall at the 
time of filing be accompanied by a power of attorney authorizing the 
agent or officer who executed the bond to so act on behalf of the 
surety. The regional director (compliance) who is authorized to approve 
the bond may, whenever deemed necessary, require additional evidence of 
the authority of the agent or officer to execute the bond or extension 
of coverage of bond. The power of attorney shall be prepared on a form 
provided by the surety company and executed under the corporate seal of 
the company. If the power of attorney submitted is other than a manually 
signed document, it shall be accompanied by a certificate of its 
validity.
    (c) Treasury Department Circular No. 570 is published in the Federal 
Register annually as of the first workday in July. As they occur, 
interim revisions of the circular are published in the Federal Register. 
Copies may be obtained from the Surety Bond Branch, Financial Management 
Service, Department of the Treasury, Washington, D.C. 20220.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (31 U.S.C. 9304, 
9306); sec. 202. Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 
5711))



Sec. 270.402  Two or more corporate sureties.

    A bond executed by two or more corporate sureties shall be the joint 
and several liability of the principal and the sureties. However, each 
corporate surety may limit its liability in terms upon the face of the 
bond in a definite, specific amount, which amount shall not exceed the 
limitations prescribed for such corporate surety by the Secretary, as 
set forth in the current revision of Treasury Department Circular 570 
(Companies Holding Certificates of Authority as Acceptable Sureties on 
Federal Bonds and as Acceptable Reinsuring Companies). (See 
Sec. 270.401(c)) When the sureties so limit their liability, the 
aggregate of such limited liabilities must equal the required amount of 
the bond.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (31 U.S.C. 9304, 
9306); sec. 202. Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 
5711))

[[Page 191]]



Sec. 270.403  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the manufacturer of cigarette papers 
and tubes may pledge and deposit, as security for the bond, securities 
which are transferable and are guaranteed as to both interest and 
principal by the United States, in accordance with the provisions of 31 
CFR Part 225--Acceptance of Bonds, Notes or Other Obligations Issued or 
Guaranteed by the United States as Security in Lieu of Surety or 
Sureties on Penal Bonds.

(61 Stat. 650, 72 Stat. 1421, 31 U.S.C. 9301, 9303, 26 U.S.C. 5711, 5 
U.S.C. 552(a) (80 Stat. 383, as amended))



Sec. 270.404  Amount of bond.

    The amount of the bond of a manufacturer of cigarette papers and 
tubes shall be not less than the maximum amount of the tax liability on 
the cigarette papers and tubes manufactured in the factory, received 
without payment of tax from other factories, and released without 
payment of tax from customs custody as provided in Sec. 270.452, during 
any month. In the case of a manufacturer commencing business, the 
production, receipts from other factories, and releases from customs 
custody, without payment of tax, shall be estimated for the purpose of 
this section. The amount of any such bond (or the total amount where 
strengthening bonds are filed) shall not exceed $20,000, nor be less 
than $1,000.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.405  Strengthening bond.

    Where the regional director (compliance) determines that the amount 
of the bond, under which a manufacturer of cigarette papers and tubes is 
currently carrying on such business, no longer adequately protects the 
revenue, the regional director (compliance) may require the manufacturer 
to file a strengthening bond in an appropriate amount with the same 
surety as that on the bond already in effect, in lieu of a superseding 
bond to cover the full liability on the basis of Sec. 270.404. The 
regional director (compliance) shall refuse to approve any strengthening 
bond where any notation is made thereon which is intended or which may 
be construed as a release of any former bond, or as limiting the amount 
of either bond to less than its full amount.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.406  Superseding bond.

    A manufacturer of cigarette papers and tubes shall file a new bond 
to supersede the current bond immediately when:
    (a) The corporate surety on the current bond becomes insolvent,
    (b) The regional director (compliance) approves a request from the 
surety of the current bond to terminate liability under the bond,
    (c) Payment of any liability under a bond is made by the surety 
thereon, or
    (d) The regional director (compliance) considers such a superseding 
bond necessary for the protection of the revenue.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.407  Extension of coverage of bond.

    An extension of the coverage of bond filed under this subpart shall 
be manifested on ATF Form 2105 (5000.7), Extension of Coverage of Bond, 
by the manufacturer of cigarette papers and tubes and by the surety on 
the bond with the same formality and proof of authority as required for 
the execution of the bond.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.408  Approval of bond and extension of coverage of bond.

    No person shall commence operations under any bond, nor extend 
operations, until such person receives from the regional director 
(compliance) notice of approval of the bond or an appropriate extension 
of coverage of the bond required under this subpart. Upon receipt of an 
approved bond or extension of coverage of bond from the regional 
director (compliance), such bond or extension of coverage of bond shall 
be retained by the manufacturer of cigarette papers and tubes in factory 
and shall be made available for inspection by any ATF officer upon 
request.

(72 Stat. 1421; 26 U.S.C. 5711)

[[Page 192]]



Sec. 270.409  Termination of liability of surety under bond.

    The liability of a surety on any bond required by this subpart shall 
be terminated only as to operations on and after the effective date of a 
superseding bond, or the date of approval of the discontinuance of 
operations by the manufacturer of cigarette papers and tubes, or 
otherwise in accordance with the termination provisions of the bond. The 
surety shall remain bound in respect of any liability for unpaid taxes, 
penalties and interest, not in excess of the amount of the bond, 
incurred by the manufacturer while the bond is in force.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 270.410  Release of pledged securities.

    Securities of the United States pledged and deposited as provided in 
Sec. 270.403 shall be released only in accordance with the provisions of 
31 CFR part 225. Such securities will not be released by the regional 
director (compliance) until liability under the bond for which they were 
pledged has been terminated. When the regional director (compliance) is 
satisfied that they may be released, the regional director (compliance) 
shall fix the date or dates on which a part or all of such securities 
may be released. At any time prior to the release of such securities, 
the regional director (compliance) may extend the date of release for 
such additional length of time as is deemed necessary.

(61 Stat. 650, 72 Stat. 1421; 31 U.S.C. 9301, 9303; 26 U.S.C. 5711)

                       Operations By Manufacturers

                                 Records



Sec. 270.421  General.

    (a) Every manufacturer of cigarette papers and tubes must keep 
records of daily operations and transactions. Records maintained must 
reflect the date and number of cigarette papers and the date and number 
of cigarette tubes:
    (1) Manufactured;
    (2) Received, without payment of tax from another factory, an export 
warehouse, customs custody, or by withdrawal from the market;
    (3) Removed, subject to tax;
    (4) Removed, without payment of tax, for export purposes, use of the 
United States or transfer in bond pursuant to Sec. 270.451; or
    (5) Lost or destroyed.
    (b) The entries for each day in the records maintained or kept under 
this subpart must be made by the close of the business day following 
that on which the operations or transactions occur. No particular form 
of records is prescribed, but the information required must be readily 
ascertainable from the records kept.
    (c) Records maintained under this section prior to January 1, 2000, 
must reflect the date and number of books or sets of cigarette papers of 
each different numerical content and the date and number of cigarette 
tubes.


(26 U.S.C. 5741.)

[T.D. ATF-240, 64 FR 71941, Dec. 22, 1999]

                                 Reports



Sec. 270.422  General.

    Every manufacturer of cigarette papers and tubes must prepare a 
report on ATF Form 5230.3 in accordance with instructions for the form. 
The report must be prepared at the times specified in this subpart and 
must be prepared whether or not any operations or transactions occurred 
during the period covered by the report. The manufacturer must retain a 
copy of each report in accordance with the provisions of this subpart.
    (a) Reports for periods on or after January 1, 2000. Reports 
submitted must reflect the total number of cigarette papers and 
cigarette tubes manufactured, received and lost or destroyed.
    (b) Reports for periods prior to January 1, 2000. Reports submitted 
must reflect the number of books or sets of cigarette papers of each 
different numerical content and the number of cigarette tubes 
manufactured, received, removed and lost or destroyed.

(26 U.S.C. 5722)

[T.D. ATF-240, 64 FR 71942, Dec. 22, 1999]

[[Page 193]]



Sec. 270.423  Opening.

    An opening report, covering the period from the date of the opening 
inventory to the end of the month, shall be made on or before the 10th 
day following the end of the month in which the business was commenced.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 270.424  Monthly.

    A report for each calendar month shall be made on or before the 20th 
day of the next succeeding month.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 270.425  Special.

    A special report, covering the unreported period to the day 
preceding the date of any special inventory required by an ATF officer, 
shall be made with such inventory. Another report, covering the period 
from the date of the special inventory to the end of the month, shall be 
made on or before the 14th day following the end of the month in which 
the inventory was made.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 270.426  Closing.

    A closing report, covering the period from the first of the month to 
the date of the closing inventory, shall be made with such inventory.

(72 Stat. 1422; 26 U.S.C. 5722)

                               Inventories



Sec. 270.431  General.

    Every manufacturer of cigarette papers and tubes must provide a true 
and accurate inventory on ATF Form 5230.2 in accordance with 
instructions for the form. Such inventory is subject to verification by 
an ATF officer. The manufacturer must retain a copy of each inventory 
completed on ATF Form 5230.2 in accordance with this subpart.
    (a) Reports of inventory for periods on or after January 1, 2000. 
Reports of inventory submitted must reflect the total number of 
cigarette papers and cigarette tubes held at the times specified in the 
subpart.
    (b) Reports of inventory for periods prior to January 1, 2000. 
Reports of inventory submitted must reflect the number of books or sets 
of cigarette papers of each different numerical content and the number 
of cigarette tubes held at the times specified in this subpart.

(26 U.S.C. 5721)

[T.D. ATF-240, 64 FR 71942, Dec. 22, 1999]



Sec. 270.432  Opening.

    An opening inventory shall be made by the manufacturer of cigarette 
papers and tubes at the time of first commencing business.

(72 Stat. 1422; 26 U.S.C. 5721)



Sec. 270.433  Special.

    A special inventory shall be made by the manufacturer of cigarette 
papers and tubes when required by any ATF officer.

(72 Stat. 1422; 26 U.S.C. 5721)



Sec. 270.434  Closing.

    A closing inventory shall be made by the manufacturer of cigarette 
papers and tubes when a change in proprietorship occurs, or when the 
manufacturer changes location of the factory to another region, or 
concludes business. Where a change in proprietorship occurs, the closing 
inventory shall be made as of the day preceding the date of the opening 
inventory of the successor.

(72 Stat. 1422; 26 U.S.C. 5721)

                           Document Retention



Sec. 270.435  General.

    All records and reports required to be kept or maintained under this 
subpart, including copies of authorizations, inventories, reports, 
returns, and claims filed with verified supporting schedules, shall be 
retained by the manufacturer for three years following the close of the 
calendar year in which filed or made, or in the case of an 
authorization, for three years following the close of the calendar year 
in which the operation under such authorization is concluded. Such 
records shall be made available for inspection by any ATF officer upon 
request.

(72 Stat. 1423; 26 U.S.C. 5741)

[[Page 194]]

                                Packages



Sec. 270.441  General.

    All cigarette papers and tubes shall, before removal subject to tax, 
be put up by the manufacturer in packages which shall be of such 
construction as will securely contain the papers or tubes therein. No 
package of cigarette papers or tubes shall have contained therein, 
attached thereto, or stamped, marked, written, or printed thereon:
    (a) Any certificate, coupon, or other device purporting to be or to 
represent a ticket, chance, share, or an interest in, or dependent on, 
the event of a lottery,
    (b) Any indecent or immoral picture, print, or representation, or
    (c) Any statement or indication that United States tax has been 
paid.

(72 Stat. 1422; 26 U.S.C. 5723)

                        Miscellaneous Operations



Sec. 270.451  Transfer in bond.

    A manufacturer of cigarette papers and tubes may transfer such 
papers and tubes, under bond, without payment of tax, to the bonded 
premises of any manufacturer of cigarette papers and tubes, or to the 
bonded premises of a manufacturer of tobacco products solely for use in 
the manufacture of cigarettes. The transfer of cigarette papers and 
tubes, without payment of tax, to the bonded premises of an export 
warehouse proprietor shall be in accordance with the provisions of part 
290 of this chapter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)



Sec. 270.452  Release from customs custody.

    Cigarette papers and tubes which were made in the United States, 
exported, and subsequently returned to the United States, may be removed 
from customs custody for transfer to the premises of a manufacturer 
without payment of the internal revenue tax, upon compliance with part 
275 of this chapter.

(72 Stat. 1418; 26 U.S.C. 5704)



Sec. 270.453  Use of the United States.

    A manufacturer of cigarette papers and tubes may remove cigarette 
papers and tubes covered under bond, without payment of tax, for use of 
the United States. Such removal shall be in accordance with the 
provisions of part 295 of this chapter.

(72 Stat. 1418; 26 U.S.C. 5704)



Sec. 270.454  Removal for export purposes.

    The removal of cigarette papers and tubes, without payment of tax, 
for shipment to a foreign country, Puerto Rico, the Virgin Islands, or a 
possession of the United States, or for consumption beyond the 
jurisdiction of the internal revenue laws of the United States, shall be 
in accordance with the provisions of part 290 of this chapter.

(72 Stat. 1418; 26 U.S.C. 5704)

                  Permanent Discontinuance of Business



Sec. 270.461  Discontinuance of operations.

    Every manufacturer of cigarette papers and tubes who desires to 
discontinue operations and close out a factory shall dispose of all 
cigarette papers and tubes on hand, in accordance with this subpart, and 
make a closing inventory and closing report, in accordance with the 
provisions of Secs. 270.434 and 270.426, respectively.

(72 Stat. 1422; 26 U.S.C. 5721, 5722)

                         Claims By Manufacturers

                                 General



Sec. 270.471  Abatement.

    A claim for abatement of the unpaid portion of the assessment of any 
tax on cigarette papers and tubes, or any liability in respect thereof, 
may be allowed to the extent that such assessment is excessive in 
amount, is assessed after the expiration of the applicable period of 
limitation, or is erroneously or illegally assessed. Any claim under 
this section shall be prepared on ATF Form 2635 (5620.8), in duplicate, 
and shall set forth the particulars under which the claim is filed. The 
original of the claim, accompanied by such evidence as is necessary to 
establish to the satisfaction of the regional director (compliance) that 
the claim is valid, shall be filed with the regional

[[Page 195]]

director (compliance) for the region in which the tax or liability was 
assessed.

(68A Stat. 792, 6404)



Sec. 270.472  Allowance.

    Relief from the payment of tax on cigarette papers and tubes may be 
extended to a manufacturer by allowance of the tax where the cigarette 
papers and tubes, after removal from the factory upon determination of 
tax and prior to the payment of such tax, are lost (otherwise than by 
theft) or destroyed by fire, casualty, or act of God, while in the 
possession or ownership of the manufacturer who removed such articles, 
or are withdrawn by the manufacturer from the market. Any claim for 
allowance under this section shall be filed on ATF Form 2635 (5620.8) 
with the regional director (compliance) for the region in which the 
articles were removed, shall be executed under penalties and perjury and 
shall show the date the cigarette papers and tubes were removed from the 
factory. A claim relating to articles lost or destroyed shall be 
supported as prescribed in Sec. 270.475. In the case of a claim relating 
to cigarette papers or tubes withdrawn from the market the schedule 
prescribed in Sec. 270.476 shall be filed with the regional director 
(compliance) for the region in which the articles are assembled. The 
manufacturer may not anticipate allowance of a claim by making the 
adjusting entry in a tax return pending consideration and action on the 
claim. Cigarette papers and tubes to which such a claim relates must be 
shown as removed on determination of tax in the return covering the 
period during which such articles were so removed. Upon action on the 
claim by the regional director (compliance) a copy of ATF Form 2635 
(5620.8) will be returned to the manufacturer as notice of such action. 
This copy of ATF Form 2635 (5620.8), with the copy of any verified 
supporting schedules, shall be retained by the manufacturer. When such 
notification of allowance of the claim or any part thereof is received 
prior to the time the return covering the tax on the cigarette papers or 
tubes to which the claim relates is to be filed, the manufacturer may 
make an adjusting entry and explanatory statement in that tax return. 
Where the notice of allowance is received after the filing of the return 
and taxpayment of the cigarette papers or tubes to which the claim 
relates, the manufacturer may make an adjusting entry and explanatory 
statement in the next tax return(s) to the extent necessary to take 
credit in the amount of the allowance.

(72 Stat. 1419, as amended, 26 U.S.C. 5705)



Sec. 270.473  Credit or refund.

    The taxes paid on cigarette papers and tubes may be credited or 
refunded (without interest) to a manufacturer on proof satisfactory to 
the regional director (compliance) that the claimant manufacturer paid 
the tax on cigarette papers and tubes lost (otherwise than by theft) or 
destroyed, by fire, casualty, or act of God, while in the possession or 
ownership of such manufacturer, or withdrawn by the manufacturer from 
the market. Any claim for credit or refund under this section shall be 
prepared on ATF Form 2635 (5620.8), in duplicate. Claims shall include a 
statement that the tax imposed on cigarette papers and tubes by 26 
U.S.C. 7652 or Chapter 52, was paid in respect to the cigarette papers 
or tubes covered by the claim, and that the articles were lost, 
destroyed, or withdrawn from the market within 6 months preceding the 
date the claim is filed. A claim for credit or refund relating to 
articles lost or destroyed shall be supported as prescribed in 
Sec. 270.475, and a claim relating to articles withdrawn from the market 
shall be accompanied by a schedule prepared and verified as prescribed 
in Secs. 270.476, and 270.477. The original and one copy of ATF Form 
2635 (5620.8), shall be filed with the regional director (compliance) 
for the region in which the tax was paid, or where the tax was paid in 
more than one region with the regional director (compliance) for any one 
of the regions in which the tax was paid. Upon action by the regional 
director (compliance) on a claim for credit, a copy of ATF Form 2635 
(5620.8) will be returned to the manufacturer as notification of 
allowance or disallowance of the claim or any part thereof. This copy, 
with the copy of any verified supporting schedules, shall be retained by 
the manufacturer. When the manufacturer is notified of allowance of the 
claim for credit

[[Page 196]]

or any part thereof, the manufacturer shall make an adjusting entry and 
explanatory statement in the next tax return(s) to the extent necessary 
to take credit in the amount of the allowance. The manufacturer may not 
anticipate allowance of a claim by taking credit on a tax return prior 
to consideration and action on such claim. The duplicate of a claim for 
refund or credit, with a copy of any verified supporting schedules, 
shall be retained by the manufacturer.

(72 Stat. 1419, as amended, 26 U.S.C. 5705)



Sec. 270.474  Remission.

    Remission of the tax liability on cigarette papers and tubes may be 
extended to the manufacturer liable for the tax where cigarette papers 
and tubes in bond are lost (other than by theft) or destroyed, by fire, 
casualty, or act of God, while in the possession or ownership of such 
manufacturer. Where cigarette papers and tubes are so lost or destroyed 
the manufacturer shall report promptly such fact, and the circumstances, 
to the regional director (compliance) for the region in which the 
factory is located. If the manufacturer wishes to be relieved of the tax 
liability, a claim on ATF Form 2635 (5620.8), in duplicate, shall also 
be prepared, setting forth the nature, date, place, and extent of the 
loss or destruction. The original and one copy of the claim, accompanied 
by such evidence as is necessary to establish to the satisfaction of the 
regional director (compliance) that the claim is valid, shall be filed 
with the regional director (compliance) for the region in which the 
factory is located. Upon action on the claim by the regional director 
(compliance), the copy of ATF Form 2635 (5620.8) will be returned to the 
manufacturer as notice of such action, which copy shall be retained by 
the manufacturer.

(72 Stat. 1419, as amended, 26 U.S.C. 5707)

                            Lost or Destroyed



Sec. 270.475  Action by claimant.

    Where cigarette papers and tubes are lost (other than by theft) or 
destroyed, by fire, casualty, or act of God, and the manufacturer 
desires to file claim under the provisions of Sec. 270.472 or 
Sec. 270.473, the manufacturer shall indicate on the claim the nature, 
date, and extent of such loss or destruction. The claim shall be 
accompanied by such evidence as necessary to establish to the 
satisfaction of the regional director (compliance) that the claim is 
valid.

(72 Stat. 1419; 26 U.S.C. 5705)

                       Withdrawn From the Market.



Sec. 270.476  Action by claimant.

    Where cigarette papers and tubes are withdrawn from the market and 
the manufacturer desires to file claim under the provisions of 
Sec. 270.472 or Sec. 270.473, the manufacturer shall assemble the 
articles in or adjacent to a factory if they are to be retained in or 
received into such factory, or at any suitable place if they are to be 
destroyed. The manufacturer shall group the articles according to the 
rate of tax applicable thereto, and shall prepare and submit a schedule 
of the articles, on ATF Form 5200.7 in accordance with the instructions, 
on the form. All copies of the schedule shall be forwarded to the 
regional director (compliance) for the region in which the articles are 
assembled.

(72 Stat. 1419; 26 U.S.C. 5705)

[T.D. ATF-384, 61 FR 54085, Oct. 17, 1996, as amended by T.D. ATF-424, 
64 FR 71932, Dec. 22, 1999]



Sec. 270.477  Action by regional director (compliance).

    Upon receipt of a schedule of cigarette papers and tubes withdrawn 
from the market, the regional director (compliance) may assign an ATF 
officer to verify the schedule and supervise disposition of the 
cigarette papers and tubes, or may authorize the manufacturer to dispose 
of the articles without supervision by so stating on the original and 
one copy of the schedule returned to the manufacturer.

(72 Stat. 1419; 26 U.S.C. 5705)



Sec. 270.478  Disposition of cigarette papers and tubes and schedule.

    When so authorized, as evidenced by the regional director's 
(compliance) statement on the schedule, the manufacturer shall dispose 
of the cigarette

[[Page 197]]

papers and tubes as specified in the schedule. After the articles are 
disposed of, the manufacturer shall execute a certificate on both copies 
of the schedule received from the regional director (compliance), to 
show the disposition and the date of disposition of the articles. In 
connection with a claim for credit or refund, the manufacturer shall 
attach the original of the schedule to the claim for credit or refund, 
ATF Form 2635 (5620.8), filed under Sec. 270.473. When an ATF officer is 
assigned to verify the schedule and supervise disposition of the 
cigarette papers and tubes, such officer shall, upon completion of the 
assignment, execute a certificate on all copies of the schedule to show 
the disposition and the date of disposition of the articles. In 
connection with a claim for allowance, the officer shall return one copy 
of the schedule to the manufacturer for the record, and in connection 
with a claim for credit or refund, the officer shall return the original 
and one copy of the schedule to the manufacturer, the original of which 
the manufacturer shall attach to the claim filed under Sec. 270.473.

(72 Stat. 1419, as amended; 26 U.S.C. 26 U.S.C. 5705)



PART 275--IMPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
275.1  Importation of tobacco products and cigarette papers and tubes.

                         Subpart B--Definitions

275.11  Meaning of terms.

                           Subpart C--General

275.21  Forms prescribed.
275.22  Retention of records.
275.23  Authority of ATF officers to enter premises.
275.24  Interference with administration.
275.25  Disposal of forfeited, condemned, and abandoned tobacco products 
          and cigarette papers and tubes.
275.26  Alternate methods or procedures.
275.27  Emergency variations from requirements.
275.28  Penalties and forfeitures.
275.29  Delegations of the Director.

                            Subpart D--Taxes

                                Tax Rates

275.30  Pipe tobacco and roll-your-own tobacco.
275.31  Cigar tax rates.
275.32  Cigarette tax rates.
275.33  Smokeless tobacco tax rates.
275.34  Cigarette papers.
275.35  Cigarette tubes.

              Classification of Large Cigars and Cigarettes

275.37  Statistical classification of large cigars.
275.38  Cigarettes.
275.39  Determination of sale price of large cigars.

                   Liability for and Payment of Taxes

275.40  Persons liable for tax.
275.41  Determination and payment of tax.

                    Exemptions from Taxes and Permits

275.50  Exemptions.

                           Assessment of Taxes

275.60  Assessment.

                      Customs' Collection of Taxes

275.62  Customs' collection of internal revenue taxes on tobacco 
          products and cigarette papers and tubes, imported or brought 
          into the United States.
275.63  Payment of tax by electronic fund transfer.

                           Subpart E--Packages

275.71  Package.
275.72  Notice for smokeless tobacco.
275.72a  Notice for pipe tobacco.
275.72b  Notice for roll-your-own tobacco.
275.72c  Package use-up rule.
275.73  Notice for cigars.
275.74  Notice for cigarettes.
275.75  Exemptions.

  Subpart F--Tobacco Products and Cigarette Papers and Tubes, Imported 
                  Into or Returned to the United States

275.81  Taxpayment.
275.82  Return of exported products.

 Release From Customs Custody of Tobacco Products and Cigarette Papers 
            and Tubes Without Payment of Tax or Certain Duty

275.83  Penalties and forfeiture for relanded products.
275.85  Release from customs custody of imported tobacco articles.
275.85a  Release from customs custody of returned articles.

[[Page 198]]

275.86  Procedure for release.

Subpart G--Puerto Rican Tobacco Products and Cigarette Papers and Tubes, 
                     Brought Into the United States

275.101  General.

   Prepayment of Tax in Puerto Rico on Tobacco Products and Cigarette 
                            Papers and Tubes

275.105  Prepayment of tax.
275.106  Examination and record of shipment by taxpayer.
275.107--275.108  [Reserved]

       Deferred Payment of Tax in Puerto Rico on Tobacco Products

275.109  Bond required for deferred taxpayment.
275.110  Record of tax computation and shipment by bonded manufacturer 
          under deferred taxpayment.
275.111  Agreement to pay tax.
275.112  Tax return.
275.113  Return periods.
275.114  Time for filing.
275.114a  Qualification for extended deferral.
275.115  Remittance with return.
275.115a  Payment of tax by electronic fund transfer.
275.116  Default.
275.117-275.118  [Reserved]
275.119  Corporate surety.
275.120  Deposit of securities in lieu of corporate surety.
275.121  Amount and account of bond.
275.122  Strengthening bond.
275.123  Superseding bond.
275.124  Extension of coverage of bond.
275.125  Approval of bond and extension of coverage of bond.
275.126  Termination of bond.
275.127  Application of surety for relief from bond.
275.128  Relief of surety from bond.
275.129  Release of pledged securities.
275.135--275.138  [Reserved]
275.139  Records.
275.140  Taxpayment in the United States.
275.141  Reports.

                          Subpart H [Reserved]

275.151-275.153  [Reserved]

                            Subpart I--Claims

                                 General

275.161  Abatement of assessment.
275.162  Losses caused by disaster occurring after September 2, 1958.
275.163  Refund of tax.

   Tobacco Products, and Cigarette Papers and Tubes Lost or Destroyed

275.165  Action by taxpayer.

   Tobacco Products and Cigarette Papers and Tubes Withdrawn From the 
                                 Market

275.170  Reduction of tobacco products to materials; ATF action.
275.171  Reduction of tobacco products to materials, action by regional 
          director (compliance).
275.172  Return to nontaxpaid status; action by taxpayer.
275.173  Return to nontaxpaid status; action by regional director 
          (compliance).
275.174  Disposition of tobacco products and cigarette papers and tubes, 
          and schedule.

                     Subpart J--Records and Reports

275.181  Records of large cigars.
275.182  Availability of records.
275.183  [Reserved]

                  Subpart K--Tobacco Products Importers

275.190  Persons required to qualify.
275.191  Application for permit.
275.192  Transitional rule.
275.193  Corporate documents.
275.194  Articles of partnership or association.
275.195  Trade name certificate.
275.196  Power of attorney.
275.197  Additional information.
275.198  Investigation of applicant.
275.199  Notice of contemplated disapproval.
275.200  Issuance of permit.
275.201  Duration of permit.
275.202  Renewal of permit.
275.203  Retention of permit and supporting documents.

                      Required Records and Reports

275.204  General.
275.205  Recordkeeping requirements.

               Filing and Retention of Records and Reports

275.206  Reports.
275.207  Filing.
275.208  Retention.

      Subpart L--Changes After Original Qualification of Importers

                             Changes in Name

275.220  Change in individual name.
275.221  Change in trade name.
275.222  Change in corporate name.

                    Changes in Ownership and Control

275.223  Fiduciary successor.
275.224  Transfer of ownership.
275.225  Change in officers, directors, or stockholders of a 
          corporation.

[[Page 199]]

275.226  Change in control of a corporation.

                     Changes in Location or Address

275.227  Change in location.
275.228  Change in address.

    Authority: 18 U.S.C. 2342; 26 U.S.C. 5701, 5703, 5704, 5705, 5708, 
5712, 5713, 5721, 5722, 5723, 5741, 5754, 5761, 5762, 5763, 6301, 6302, 
6313, 6404, 7101, 7212, 7342, 7606, 7651, 7652, 7805; 31 U.S.C. 9301, 
9303, 9304, 9306.



                     Subpart A--Scope of Regulations



Sec. 275.1  Importation of tobacco products and cigarette papers and tubes.

    This part contains regulations relating to tobacco products and 
cigarette papers and tubes imported into the United States from a 
foreign country or brought into the United States from Puerto Rico, the 
Virgin Islands, or a possession of the United States; the removal of 
tobacco products from a customs bonded manufacturing warehouse, class 6; 
restrictions on the importation of previously exported tobacco products 
and cigarette papers and tubes; and the release of tobacco products and 
cigarette papers and tubes from customs custody, without payment of 
internal revenue tax or customs duty attributable to the internal 
revenue tax.

[T.D. ATF-421, 64 FR 71924, Dec. 22, 1999]



                         Subpart B--Definitions



Sec. 275.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, the 
following terms shall have the meanings given in this section, unless 
the context clearly indicates otherwise. Words in the plural form shall 
include the singular, and vice versa, and words indicating the masculine 
gender shall include the feminine. The terms ``includes'' and 
``including'' do not exclude things not listed which are in the same 
general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.16A, Delegation Order--Delegation of the Director's Authorities in 
27 CFR Part 275, Importation of Tobacco Products and Cigarette Papers 
and Tubes and ATF Order 1130.15, Delegation Order--Delegation of Certain 
of the Director's Authorities in 27 CFR Parts 270, 275 and 296.
    Associate Director (Compliance Operations). The Associate Director 
(Compliance Operations) in the Bureau of Alcohol, Tobacco and Firearms, 
who is responsible to, and functions under the direction and supervision 
of, the Director.
    ATF. The Bureau of Alcohol, Tobacco and Firearms.
    ATF officer. An officer of the Bureau of Alcohol, Tobacco and 
Firearms (ATF) authorized to perform any function relating to the 
administration or enforcement of this part.
    Bank. Any commercial bank.
    Banking day. Any day during which a bank is open to the public for 
carrying on substantially all its banking functions.
    Business day. Any day, other than a Saturday, Sunday, or a legal 
holiday. (The term legal holiday includes all holidays in the District 
of Columbia and, in the case of bonded manufacturers in Puerto Rico, all 
legal holidays in the Commonwealth of Puerto Rico.)
    Bonded manufacturer. A manufacturer of tobacco products in Puerto 
Rico who has an approved bond, in accordance with the provisions of this 
part, authorizing him to defer the payment in Puerto Rico on the 
internal revenue tax imposed on such products by 26 U.S.C. 7652(a) as 
provided in this part.
    CFR. The Code of Federal Regulations.
    Chewing Tobacco. Any leaf tobacco that is not intended to be smoked.
    Chief, Puerto Rico Operations. The primary representative in Puerto 
Rico of the Bureau of Alcohol, Tobacco and Firearms.
    Cigar. Any roll of tobacco wrapped in leaf tobacco or in any 
substance containing tobacco (other than any roll of tobacco which is a 
cigarette within the meaning of paragraph (2) of the definition for 
cigarette).
    Cigarette. (1) Any roll of tobacco wrapped in paper or in any 
substance not containing tobacco, and
    (2) Any roll of tobacco wrapped in any substance containing tobacco

[[Page 200]]

which, because of its appearance, the type of tobacco used in the 
filler, or its packaging and labeling, is likely to be offered to, or 
purchased by, consumers as a cigarette described in paragraph (1) of 
this definition.
    Cigarette paper. Paper, or any other material except tobacco, 
prepared for use as a cigarette wrapper.
    Cigarette papers. Taxable books or sets of cigarette papers, i.e., 
books or sets of cigarette papers containing more than 25 papers each.
    Cigarette tube. Cigarette paper made into a hollow cylinder for use 
in making cigarettes.
    Commercial bank. A bank, whether or not a member of the Federal 
Reserve System, which has access to the Federal Reserve Communications 
System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a 
communications network that allows Federal Reserve System member banks 
to effect a transfer of funds for their customers (or other commercial 
banks) to the Treasury Account at the Federal Reserve Bank in New York.
    Computation or computed. When used with respect to the tax on 
tobacco products of Puerto Rican manufacture, computation or computed 
shall mean that the bonded manufacturer has ascertained the quantity and 
kind (small cigars, large cigars, small cigarettes, large cigarettes, 
chewing tobacco, snuff, pipe tobacco, or roll-your-own tobacco) of 
tobacco products and the sale price of large cigars being shipped to the 
United States; that adequate bond has been posted to cover the payment, 
in Puerto Rico, of the tax on such products to be deferred under subpart 
G of this part; that the tax imposed on such products by 26 U.S.C. 
7652(a) has been calculated; that the bonded manufacturer has executed 
an agreement to pay the internal revenue tax which will become due with 
respect to such products, as provided in this part; and that an ATF 
officer has verified and executed a certification of such calculation.
    Customs officer. Any officer of the Customs Service or any 
commissioned, warrant, or petty officer of the Coast Guard, or any agent 
or other person authorized by law or designated by the Secretary of the 
Treasury to perform any duties of an officer of the Customs Service.
    Determine. To establish enough information about taxable products at 
the time of removal to calculate the tax, specifically the quantity 
(pounds or number) and kind (for example, cigarettes, snuff, paper 
tubes). Where the tax rate depends on additional information (such as 
number of cigarette papers to a set before 1/1/2000 or sale price of 
large cigars), that information must also be established as part of tax 
determination.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    District director. A district director of internal revenue.
    Electronic fund transfer or EFT. Any transfer of funds effected by a 
bonded manufacturer's commercial bank, either directly or through a 
correspondent banking relationship, via the Federal Reserve 
Communications System (FRCS) or Fedwire to the Treasury Account at the 
Federal Reserve Bank of New York.
    Export warehouse. A bonded internal revenue warehouse for the 
storage of tobacco products and cigarette papers and tubes, upon which 
the internal revenue tax has not been paid, for subsequent shipment to a 
foreign country, Puerto Rico, the Virgin Islands, or a possession of the 
United States, or for consumption beyond the jurisdiction of the 
internal revenue laws of the United States.
    Export warehouse proprietor. Any person who operates an export 
warehouse.
    Factory. The premises of a manufacturer of tobacco products or 
cigarette papers or tubes in which he carries on such business.
    Fiscal year. The period which begins October 1 and ends on the 
following September 30.
    HTS. The Harmonized Tariff Schedule of the United States, as 
published by the United States International Trade Commission.
    Importer. Any person in the United States to whom non-taxpaid 
tobacco products or cigarette papers or tubes manufactured in a foreign 
country, Puerto Rico, the Virgin Islands, or a possession of the United 
States are

[[Page 201]]

shipped or consigned; any person who removes cigars for sale or 
consumption in the United States from a Customs bonded manufacturing 
warehouse; and any person who smuggles or otherwise unlawfully brings 
tobacco products or cigarette papers or tubes into the United States.
    Large cigarettes. Cigarettes weighing more than three pounds per 
thousand.
    Large cigars. Cigars weighing more than three pounds per thousand.
    Manufacturer of cigarette papers and tubes. Any person who makes up 
cigarette papers or cigarette tubes, except for personal use or 
consumption.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Package. The container in which tobacco products or cigarette papers 
or tubes are put up by the manufacturer or the importer for delivery to 
the consumer.
    Person. An individual, partnership, association, company, 
corporation, estate, or trust.
    Pipe tobacco. Any tobacco which because of its appearance, type, 
packaging, or labeling, is suitable for use and likely to be offered to, 
or purchased by, consumers as tobacco to be smoked in a pipe.
    Port Director of Customs. The director of any port or port of entry 
as defined in 19 CFR 101.1. A list of ports is set forth in 19 CFR 
101.3.
    Records. Statements, declarations, books, papers, correspondence, 
accounts, technical data, automated record storage devices (e.g., 
magnetic discs and tapes), computer programs necessary to retrieve 
information in a usable form, and other documents that:
    (1) Pertain to any importation of tobacco products or cigarette 
papers or tubes, or to the information contained in the documents 
required by law or regulation under the Tariff Act of 1930, as amended, 
in connection with the importation or shipment into the United states 
from Puerto Rico of merchandise; and
    (2) Are of the type normally kept in the ordinary course of 
business; and
    (3) Are sufficiently detailed to:
    (i) Establish the right to make the importation or shipment into the 
United States from Puerto Rico;
    (ii) Establish the correctness of any importation or shipment into 
the United States from Puerto Rico;
    (iii) Determine the liability of any person for duties and taxes 
due, or which may be due, to the United States;
    (iv) Determine the liability of any person for fines, penalties, and 
forfeitures; and
    (v) Determine whether the person has complied with the laws and 
regulations administered by ATF and the Customs Service, and any other 
documents required under laws or regulations administered by ATF and the 
Customs Service.
    Region. A Bureau of Alcohol, Tobacco and Firearms Region.
    Regional Director (compliance). The principal regional official 
responsible for administering regulations in this part.
    Relanding. Any tobacco products, cigarette papers or tubes, which 
have been labeled or shipped for exportation (including to Puerto Rico) 
as prescribed in this chapter, previously exported and returned within 
the jurisdiction of the United States. This term does not apply to any 
tobacco products, cigarette papers or tubes that are placed in 
appropriately marked receptacles by travelers or passengers prior to 
making their declaration to a U.S. Customs officer upon arrival in the 
United States.
    Removal or Remove. The removal of tobacco products or cigarette 
papers or tubes from the factory or release from internal revenue bond 
under 26 U.S.C. 5704, or release from customs custody, including 
conditional release in accordance with 19 CFR 141.0a(i), and shall also 
include the smuggling or other unlawful importation of such articles 
into the United States.
    Roll-your-own tobacco. Any tobacco which, because of its appearance, 
type, packaging, or labeling, is suitable for

[[Page 202]]

use and likely to be offered to, or purchased by, consumers as tobacco 
for making cigarettes.
    Sale price. The price for which large cigars are sold by the 
importer or manufacturer, determined in accordance with Sec. 275.39 and 
used for computation of the excise tax.
    Small cigarettes. Cigarettes weighing not more than three pounds per 
thousand.
    Small cigars. Cigars weighing not more than three pounds per 
thousand.
    Smokeless tobacco. Any chewing tobacco or snuff.
    Snuff. Any finely cut, ground, or powdered tobacco that is not 
intended to be smoked.
    This chapter. Chapter I, title 27, Code of Federal Regulations.
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    Treasury Account. The Department of the Treasury's General Account 
at the Federal Reserve Bank of New York.
    United States. When used in a geographical sense shall include only 
the States and the District of Columbia.
    U.S.C. The United States Code.

(Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6301); 
June 29, 1956, ch. 462, 70 Stat. 391 (26 U.S.C. 6301))

[T.D. ATF-48, 43 FR 13554, Mar. 31, 1978; 44 FR 55855, Sept. 28, 1979, 
as amended by T.D. ATF-77, 46 FR 3009, Jan. 13, 1981; T.D. ATF-232, 51 
FR 28084, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-251, 52 FR 19340, May 22, 1987; T.D. ATF-284, 54 FR 12190, Mar 24, 
1989; T.D. ATF-289, 54 FR 48840, Nov. 27, 1989; T.D. ATF-421, 64 FR 
71924, Dec. 22, 1999; T.D. ATF-424, 64 FR 71932, Dec. 22, 1999; T.D. 
ATF-420, 64 FR 71942, Dec. 22, 1999; T.D. ATF-422, 64 FR 71948, Dec. 22, 
1999; T.D. ATF-422c, 65 FR 63545, Oct. 24, 2000; T.D. ATF-444, 66 FR 
13850, Mar. 8, 2001]



                           Subpart C--General



Sec. 275.21  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part. When a return, 
form, claim, or other document called for under this part is required by 
this part, or by the document itself, to be executed under penalties of 
perjury, it shall be executed under penalties of perjury.
    (b) Requests for forms should be mailed to the AFT Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 US.C. 552(a) (80 Stat. 383, as amended)

[T.D. ATF-92, 46 FR 46922, Sept. 23, 1981, as amended by T.D. ATF-232, 
51 FR 28084, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-372, 61 FR 20725, May 8, 1996]



Sec. 275.22  Retention of records.

    All records required to be kept under this part, including copies of 
claims and schedules, authorizations, notices of release, reports, and 
returns, shall be retained for three years following the close of the 
year in which filed or made, or in the case of an authorization, for 
three years following the close of the calendar year in which the 
operation under such authorization is concluded. Such records shall be 
made available for inspection by any ATF officer upon his request.

(72 Stat. 1423; 26 U.S.C. 5741)

[26 FR 8189, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 275.23  Authority of ATF officers to enter premises.

    Any ATF officer may enter in the daytime any premises where tobacco 
products or cigarette papers or tubes are produced or kept so far as it 
may be necessary for the purpose of examining such articles. When such 
premises are open at night, any ATF officer may enter them, while so 
open, in the performance of his official duties. The owner of such 
premises, or person having the superintendence of the same, who refuses 
to admit any ATF officer or permit him to examine such articles shall be 
liable to the penalties prescribed by law for the offense.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 40, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28084, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

[[Page 203]]



Sec. 275.24  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this part, or endeavors to 
intimidate or impede any ATF officer acting in his official capacity, or 
forcibly rescues or attempts to rescue or causes to be rescued any 
property, after it has been duly seized for forfeiture to the United 
States in connection with a violation of the internal revenue laws, 
shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)

[26 FR 8189, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 275.25  Disposal of forfeited, condemned, and abandoned tobacco products and cigarette papers and tubes.

    When any Federal, State, or local officer having custody of 
forfeited, condemned, or abandoned tobacco products or cigarette papers 
or tubes, upon which the Federal tax has not been paid, is of the 
opinion that the sale thereof will not bring a price equal to the tax 
due and payable thereon, and the expenses incident to the sale thereof, 
he shall not sell, nor cause to be sold, such articles for consumption 
in the United States. Where the articles are not sold, the officer may 
deliver them to a Federal or State hospital or institution (if they are 
fit for consumption) or cause their destruction by burning completely or 
by rendering them unfit for consumption. Where such articles are sold, 
they shall not be released by the officer having custody thereof until 
they are properly packaged and taxpaid, which tax shall be considered as 
a portion of the sales price. Except where the tax is to be paid to the 
Port Directors of Customs or other authorized customs officer in 
accordance with Customs regulations (19 CFR part 127) on sales of 
articles by customs officers, the payment of tax on such articles must 
be evidenced by presentation, to the officer having custody of the 
articles, of a receipt from the appropriate ATF officer showing such 
payment. In the case of such articles held by or for the Federal 
Government, the sale thereof shall be subject to the applicable 
provisions of the Regulations of the General Services Administration, 
Title 1, Personal Property Management.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 40, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28084, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-422, 64 FR 71948, Dec. 22, 
1999]



Sec. 275.26  Alternate methods or procedures.

    An importer, on specific approval by the Director as provided in 
this section, may use an alternate method or procedure in lieu of a 
method or procedure specifically prescribed in this part. The Director 
may approve an alternate method or procedure, subject to stated 
conditions, when he finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure,
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue, and
    (c) The alternate method of procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part.

No alternate method or procedure relating to the giving of any bond or 
to the assessment, payment, or collection of tax, shall be authorized 
under this section. When an importer desires to employ an alternate 
method or procedure, he shall submit a written application to do so, in 
triplicate, to the regional director (compliance) for transmittal to the 
Director. The application shall specifically describe the proposed 
alternate method or procedure, and shall set forth the reasons therefor. 
Alternate methods or procedures shall not be employed until the 
application has been approved by the Director. The importer shall, 
during the period of authorization of an alternate method or procedure, 
comply with the terms of

[[Page 204]]

the approved application. Authorization for any alternate method or 
procedure may be withdrawn whenever in the judgment of the Director the 
revenue is jeopardized or the effective administration of this part is 
hindered. The importer shall retain, as part of his records, any 
authorization of the Director under this section.

[26 FR 8190, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 275.27  Emergency variations from requirements.

    The Director may approve methods of operation other than as 
specified in this part, where he finds that an emergency exists and the 
proposed variations from the specified requirements are necessary, and 
the proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications,
    (b) Will not hinder the effective administration of this part, and
    (c) Will not be contrary to any provision of law.

Variations from requirements granted under this section are conditioned 
on compliance with the procedures, conditions, and limitations set forth 
in the approval of the application. Failure to comply in good faith and 
with such procedures, conditions, and limitations shall automatically 
terminate the authority for such variations and the importer thereupon 
shall fully comply with the prescribed requirements of regulations from 
which the variations were authorized. Authority for any variations may 
be withdrawn whenever in the judgment of the Director the revenue is 
jeopardized or the effective administration of this part is hindered by 
the continuation of such variation. Where an importer desires to employ 
such variation, he shall submit a written application to do so, in 
triplicate, to the regional director (compliance) for transmittal to the 
Director. The application shall describe the proposed variations and set 
forth the reasons therefor. Variations shall not be employed until the 
application has been approved. The importer shall retain, as part of his 
records, any authorization of the Director under this section.

[26 FR 8190, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 275.28  Penalties and forfeitures.

    Anyone who fails to comply with the provisions of this part becomes 
liable to the civil and criminal penalties, and forfeitures, provided by 
law.

(72 Stat. 1425, 1426; 26 U.S.C. 5761, 5762, 5763)

[26 FR 8190, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 275.29  Delegations of the Director.

    The Director has general authority to take action on all matters 
under the regulations in this part 275. Some of the authorities in this 
part are redelegated to ``appropriate ATF officers''. The title of the 
appropriate ATF officer for each delegation is listed by section in ATF 
Order 1130.16A, Delegation Order--Delegation of Certain of the 
Director's Authorities in 27 CFR parts 270, 275, and 296. ATF delegation 
orders, such as ATF Order 1130.16A, are available from the ATF 
Distribution Center, PO Box 5950, Springfield, Virginia 22150-5190, or 
from the ATF web site (http://www.atf.treas.gov).

[T.D. ATF-420, 64 FR 71942, Dec. 22, 1999, as amended by T.D. ATF-444, 
66 FR 13850, Mar. 8, 2001]



                            Subpart D--Taxes

                                Tax Rates



Sec. 275.30  Pipe tobacco and roll-your-own tobacco.

    Pipe tobacco and roll-your-own tobacco are taxed at the following 
rates under 26 U.S.C. 5701(f) and (g), respectively:

----------------------------------------------------------------------------------------------------------------
                                                  Tax rate per pound \1\ for removals during the years
                Product                -------------------------------------------------------------------------
                                             1993 to  1999            2000 and  2001          2002 and  after
----------------------------------------------------------------------------------------------------------------
Pipe tobacco..........................  $0.675                   $0.9567                  $1.0969

[[Page 205]]

 
Roll-your-own tobacco.................  No tax                   0.9567                   1.0969
----------------------------------------------------------------------------------------------------------------
\1\ Prorate tax for fractions of a pound.


[T.D. ATF-420, 64 FR 71942, Dec. 22, 1999]



Sec. 275.31  Cigar tax rates.

    (a) Cigars are taxed at the following rates under 26 U.S.C. 5701(a):

----------------------------------------------------------------------------------------------------------------
                                                         Tax rate for removals during the years
                Product                -------------------------------------------------------------------------
                                             1993 to  1999            2000 and  2001          2002 and  after
----------------------------------------------------------------------------------------------------------------
Small cigars (per thousand)...........  $1.125                   $1.594                   $1.828
Large cigars \1\
    percentage of sale price..........  12.75%                   18.063%                  20.719%
    but not to exceed per thousand....  $30                      $42.50                   $48.75
----------------------------------------------------------------------------------------------------------------
\1\ For large cigars, the percentage tax rate applies when the sale price is $235.294 per thousand or less, and
  the flat tax rate applies when the sale price is more than $235.294.

    (b) See Sec. 275.39 of this part for rules concerning determination 
of sale price of large cigars.
    (c) Cigars not exempt from tax under 26 U.S.C. chapter 52 and the 
provisions of this part which are removed but not intended for sale 
shall be taxed at the same rate as similar cigars removed for sale.

[T.D. ATF-420, 64 FR 71942, Dec. 22, 1999]



Sec. 275.32  Cigarette tax rates.

    Cigarettes are taxed at the following rates under 26 U.S.C. 5701(b):

----------------------------------------------------------------------------------------------------------------
                                                   Tax rate per thousand for removals during the years
                Product                -------------------------------------------------------------------------
                                             1993 to  1999            2000 and  2001          2002 and  after
----------------------------------------------------------------------------------------------------------------
Small cigarettes......................  $12                      $17                      $19.50
Large cigarettes up to 6\1/2\" long...  25.20                    35.70                    40.95
Large cigarettes over 6\1/2\" long....     Use tax rates for small cigarettes, but count each 2\3/4\ inches or
                                                 fraction thereof of the length of each as one cigarette.
----------------------------------------------------------------------------------------------------------------


[T.D. ATF-420, 64 FR 71943, Dec. 22, 1999]



Sec. 275.33  Smokeless tobacco tax rates.

    Smokeless tobacco products are taxed at the following rates under 26 
U.S.C. 5701(e):

------------------------------------------------------------------------
                                    Tax rate per pound \1\ for removals
                                              during the years
             Product              --------------------------------------
                                     1993 to      2000 or      2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Snuff............................        $0.36        $0.51       $0.585
Chewing tobacco..................        $0.12        $0.17       $0.195
------------------------------------------------------------------------
\1\ Prorate tax for fractions of a pound.


[[Page 206]]


[T.D. ATF-420, 64 FR 71943, Dec. 22, 1999]



Sec. 275.34  Cigarette papers.

    Cigarette papers are taxed at the following rates under 26 U.S.C. 
5701(c):

------------------------------------------------------------------------
                                    Tax rate for each 50 papers \1\ for
                                         removals during the years
             Product              --------------------------------------
                                     1993 to      2000 or      2002 and
                                     1999 \2\       2001        after
------------------------------------------------------------------------
Cigarette papers up to 6\1/2\"         $0.0075      $0.0106      $0.0122
 long............................
Cigarette papers over 6\1/2\"
 long............................   Use rates above, but count each 2\3/
                                     4\ inches, or fraction thereof, of
                                    the length of each as one cigarette
                                                   paper.
------------------------------------------------------------------------
\1\ Tax rate for less than 50 papers is the same. The tax is not
  prorated.
\2\ Before January 1, 2000, books or sets containing 25 papers or less
  were not taxable. On and after January 1, 2000, all cigarette papers
  are taxable.


[T.D. ATF-420, 64 FR 71943, Dec. 22, 1999]



Sec. 275.35  Cigarette tubes.

    Cigarette tubes are taxed at the following rates under 26 U.S.C. 
5701(d):

------------------------------------------------------------------------
                                     Tax rate for each 50 tubes \1\ for
                                         removals during the years
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Cigarette tubes up to 6\1/2\"           $0.015      $0.0213      $0.0244
 long............................
Cigarette tubes over 6\1/2\" long   Use rates above, but count each 2\3/
                                     4\ inches, or fraction thereof, of
                                    the length of each as one cigarette
                                                   tube.
------------------------------------------------------------------------
\1\ Tax rate for less than 50 tubes is the same. The tax is not
  prorated.


[T.D. ATF-420, 64 FR 71943, Dec. 22, 1999]

              Classification of Large Cigars and Cigarettes



Sec. 275.37  Statistical classification of large cigars.

    Large cigars are divided into eight classes for statistical 
purposes, according to the wholesale price or sale price, as applicable. 
The eight classes are as follows:
    (a) Class A. Large cigars with a wholesale price or sale price, as 
applicable of not more than $33.00 per thousand,
    (b) Class B. Large cigars with a wholesale price or sale price, as 
applicable of more than $33.00 per thousand but not more than $51.00 per 
thousand,
    (c) Class C. Large cigars with a wholesale price or sale price, as 
applicable of more than $51.00 per thousand but not more than $66.00 per 
thousand,
    (d) Class D. Large cigars with a wholesale price or sale price, as 
applicable of more than $66.00 per thousand but not more than $105.00 
per thousand,
    (e) Class E. Large cigars with a wholesale price or sale price, as 
applicable of more than $105.00 per thousand but not more than $120.00 
per thousand,
    (f) Class F. Large cigars with a wholesale price or sale price, as 
applicable of more than $120.00 per thousand but not more than $154.00 
per thousand,
    (g) Class G. Large cigars with a wholesale price or sale price, as 
applicable of more than $154.00 per thousand but not more than $235.294 
per thousand, and
    (h) Class H. Large cigars with a wholesale price or sale price, as 
applicable of more than $235.294 per thousand.

[T.D. ATF-40, 42 FR 5003, Jan. 26, 1977; as amended by T.D. ATF-307, 55 
FR 52744, Dec. 21, 1990]



Sec. 275.38  Cigarettes.

    For internal revenue tax purposes, small cigarettes are designated 
Class A

[[Page 207]]

and large cigarettes are designated Class B.

(72 Stat. 1414; 26 U.S.C. 5701)

[26 FR 8191, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 275.39  Determination of sale price of large cigars.

    The tax imposed on large cigars is computed based on the sale price 
(the price for which the large cigars are sold by the importer or 
manufacturer). In addition to money, goods or services exchanged for 
cigars may be considered as part of the sale price. See Sec. 270.22(b) 
of this chapter for information on determining the sale price in special 
cases.

[T.D. ATF-420, 64 FR 71944, Dec. 22, 1999; T.D. ATF-422, 64 FR 71948, 
Dec. 22, 1999; T.D. ATF-422a, 65 FR 15058, Mar. 31, 2000]

                   Liability for and Payment of Taxes



Sec. 275.40  Persons liable for tax.

    The importer of tobacco products or cigarette papers and tubes will 
be liable for the internal revenue taxes imposed thereon by 26 U.S.C. 
5701 or 7652: Provided, That tobacco products or cigarette papers or 
tubes (other than those previously exported and returned) imported or 
brought into the United States, may be released from customs custody 
without payment of tax, for delivery to the proprietor of an export 
warehouse, to a manufacturer of tobacco products, or to a manufacturer 
of cigarette papers or tubes (except for tobacco products), if such 
articles are not put up in packages (see Sec. 275.11). Under these 
circumstances the transferee will become liable for the internal revenue 
tax on such articles upon release from customs custody and the importer 
will thereupon be relieved of the liability for such tax. If the 
transferee is also the importer, then the importer will not be relieved 
of the liability for such tax.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652); 
sec. 201, Pub. L. 85-859, Stat. 1417, as amended (26 U.S.C. 5703))

[T.D. ATF-422, 64 FR 71948, Dec. 22, 1999]



Sec. 275.41  Determination and payment of tax.

    Tobacco products and cigarette papers and tubes, imported or brought 
into the United States, on which internal revenue taxes are due and 
payable, must not be released from customs custody until such taxes have 
been determined and paid.

(68A Stat. 907, as amended, 72 Stat. 1417; 26 U.S.C. 7652, 5703)

[T.D. ATF-422, 64 FR 71949, Dec. 22, 1999]

                    Exemptions From Taxes and Permits



Sec. 275.50  Exemptions.

    The Harmonized Tariff Schedule of the United States (19 U.S.C. 1202) 
and Customs Regulations, 19 CFR, chapter I, provide for certain 
exemptions from internal revenue taxes with respect to tobacco products 
and cigarette papers and tubes imported into the United States. These 
exemptions include, but are not limited to, certain importations in 
passengers' baggage, for use of crew members, and by foreign officials. 
Those persons importing tobacco products and cigarette papers or tubes 
as described in this section are not required to obtain a permit.

[T.D. 6871, 31 FR 41, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28084, Aug. 5, 1986; T.D. 
ATF-243, 52 FR 43194, Dec. 1, 1986; T.D. ATF-284, 54 FR 12190, Mar. 24, 
1989; T.D. ATF-422, 64 FR 71949, Dec. 22, 1999]

                           Assessment of Taxes



Sec. 275.60  Assessment.

    Whenever any person required by law to pay internal revenue tax on 
tobacco products or cigarette papers or tubes fails to pay such tax, the 
tax shall be ascertained and assessed against such person, subject to 
the limitations prescribed in 26 U.S.C. 6501. The tax so assessed shall 
be in addition to the penalties imposed by law for failure to pay such 
tax when required. Except in cases where delay may jeopardize collection 
of the tax, or where the amount is nominal or the result of an evident 
mathematical error, no such assessment shall be made until and after 
notice has been afforded such person to show cause against assessment. 
The person will be allowed 45 days from the

[[Page 208]]

date of such notice to show cause, in writing, against such assessment.

(72 Stat. 1417; 26 U.S.C. 5703)

[T.D. 6871, 31 FR 41, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28084, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]

                      Customs' Collection of Taxes



Sec. 275.62  Customs' collection of internal revenue taxes on tobacco products and cigarette papers and tubes, imported or brought into the United States.

    Internal revenue taxes on tobacco products and cigarette papers and 
tubes, imported or brought into the United States, which are to be paid 
to the Port Director of Customs or other authorized customs employee, in 
accordance with this part, must be collected, accounted for, and 
deposited as internal revenue collections by the Port Director of 
Customs, in accordance with customs procedures and regulations.

[T.D. ATF-422, 64 FR 71949, Dec. 22, 1999]



Sec. 275.63  Payment of tax by electronic fund transfer.

    (a) Each importer who was liable, during a calendar year, for a 
gross amount equal to or exceeding five million dollars in taxes on 
cigars, cigarettes, cigarette papers, and cigarette tubes combining tax 
liabilities incurred under this part and part 270 of this chapter, shall 
use a commercial bank in making payment by electronic fund transfer 
(EFT) of such taxes during the succeeding calendar year. Payment of such 
taxes by cash, check, or money order is not authorized for an importer 
who is required, by this section, to make remittances by EFT. For 
purposes of this section, the dollar amount of tax liability is defined 
as the gross tax liability on all taxable withdrawals and importations 
(including similar products brought into the United States from Puerto 
Rico or the Virgin Islands) during the calendar year, without regard to 
any drawbacks, credits, or refunds, for all premises from which such 
activities are conducted by the taxpayer.
    (b) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (c) For the purposes of this section, (1) electronic fund transfer 
or EFT means any transfer of funds, other than a transaction originated 
by check, draft, or similar paper instrument, which is initiated through 
an electronic terminal, telephonic instrument, or computer of magnetic 
tape, so as to order, instruct, or authorize a financial institution to 
either debit or credit an account, in accordance with procedures 
established by the U.S. Customs Service, and (2) electronic fund 
transfer or EFT does not have the meaning defined in Sec. 275.11 for use 
elswhere in this part.
    (d) An importer who is required by this section to make remittances 
by EFT, shall make the EFT remittance in accordance with the 
requirements of the U.S. Customs Service.

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
Sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended (26 U.S.C. 5703))

[T.D. ATF-245, 52 FR 534, Jan. 7, 1987, as amended by T.D. ATF-384, 61 
FR 54095, Oct. 17, 1996]



                           Subpart E--Packages



Sec. 275.71  Package.

    All tobacco products, cigarette papers and tubes, except as provided 
in Sec. 275.75, shall, before removal subject to internal revenue tax, 
be put up in packages which shall be of such construction as will 
securely contain the

[[Page 209]]

articles therein and maintain the notice thereon as required by this 
subpart. No package of tobacco products or cigarette papers or tubes 
shall have contained in, attached to, or stamped, marked, written, or 
printed thereon (a) any certificate, coupon, or other device purporting 
to be or to represent a ticket, chance, share, or an interest in, or 
dependent on, the event of a lottery, (b) any indecent or immoral 
picture, print, or representation, or (c) any statement or indication 
that United States tax has been paid.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 41, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28084, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 275.72  Notice for smokeless tobacco.

    (a) Product designation. Every package of chewing tobacco or snuff 
shall, before removal subject to internal revenue tax, have adequately 
imprinted thereon, or on a label securely affixed thereto, the 
designation ``chewing tobacco'' or ``snuff.'' As an alternative, 
packages of chewing tobacco may be designated ``Tax Class C,'' and 
packages of snuff may be designated ``Tax Class M.''
    (b) Product weight. Every package of chewing tobacco or snuff shall, 
before removal subject to internal revenue tax, have adequately 
imprinted thereon, or on a label securely affixed thereto, a clear 
statement of the actual pounds and ounces of the product contained 
therein. As an alternative, the shipping cases containing packages of 
chewing tobacco or snuff may, before removal, have adequately imprinted 
thereon, or on a label securely affixed thereto, a clear statement, in 
pounds and ounces, of the total weight of the product, the tax class of 
the product, and the total number of the packages of product contained 
therein.

(Approved by the Office of Management and Budget under control number 
1512-0502)

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-243, 51 FR 43194, Dec. 1, 1986, as amended by T.D. ATF-446, 66 
FR 16602, Mar. 27, 2001]



Sec. 275.72a  Notice for pipe tobacco.

    (a) Product designation. Every package of pipe tobacco shall, before 
removal subject to internal revenue tax, have adequately imprinted 
thereon, or on a label securely fixed thereto, the designation ``pipe 
tobacco.'' As an alternative, packages of pipe tobacco may be designated 
``Tax Class L.''
    (b) Product weight. Every package of pipe tobacco shall, before 
removal subject to internal revenue tax, have adequately imprinted 
thereon, or on a label securely affixed thereto, a clear statement of 
the actual pounds and ounces of the product contained therein.

[T.D. ATF-289, 54 FR 48841, Nov. 27, 1989. Redesignated by T.D. ATF-381, 
61 FR 37004, July 16, 1996]



Sec. 275.72b  Notice for roll-your-own tobacco.

    (a) Product designation. Before removal subject to tax, roll-your-
own tobacco must have adequately imprinted on, or on a label securely 
affixed to, the package, the designation ``roll-your-own tobacco'' or 
``cigarette tobacco'' or ``Tax Class J.''
    (b) Product weight. Before removal subject to tax, roll-your-own 
tobacco must have a clear statement of the actual weight in pounds and 
ounces of the product in the package. This statement must be adequately 
imprinted on, or on a label securely affixed to, the package.

(Approved by the Office of Management and Budget under control number 
1512-0502)

[T.D. ATF-429, 65 FR 57547, Sept. 25, 2000]



Sec. 275.72c  Package use-up rule.

    (a) An importer must have used such packaging for roll-your-own 
tobacco before January 1, 2000.
    (b) An importer of roll-your-own tobacco may continue to place roll-
your-own tobacco in packages that do not meet the marking requirements 
of Sec. 275.72b(b) until April 1, 2000.
    (c) An importer of roll-your-own tobacco may continue to place roll-
your-own tobacco in packages that do not meet the requirements of 
Sec. 275.72b(a) until October 1, 2000.

[T.D. ATF-427, 65 FR 40051, June 29, 2000]

[[Page 210]]



Sec. 275.73  Notice for cigars.

    Before removal subject to internal revenue tax, every package of 
cigars, except as provided in Sec. 275.75, shall have adequately 
imprinted on it, or on a label securely affixed to it--
    (a) The designation ``cigars'';
    (b) The quantity of cigars contained in the package; and
    (c) For small cigars, the classification of the product for tax 
purposes (i.e., either ``small'' or ``little'').

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-80, 46 FR 18310, Mar. 24, 1981]



Sec. 275.74  Notice for cigarettes.

    Every package of cigarettes, except as provided in Sec. 275.75, 
shall, before removal subject to internal revenue tax, have adequately 
imprinted thereon, or on a label securely affixed thereto, the 
designation ``cigarettes'', the quantity of such product contained 
therein; and the classification for tax purposes, i.e., for small 
cigarettes either ``small'' or ``Class A'', and for large cigarettes, 
either ``large'' or ``Class B''.

(72 Stat. 1422; 26 U.S.C. 5723)

[26 FR 8192, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 275.75  Exemptions.

    The provisions of this subpart requiring that tobacco products and 
cigarette papers and tubes be put up in packages and that proper notice 
be placed on such packages shall not apply to imported tobacco products 
and cigarette papers and tubes authorized to be released from customs 
custody, without payment of internal revenue tax, pursuant to 
Sec. 275.50, and shall not apply to tobacco products imported in 
passengers' baggage, or by mail where the value does not exceed $250, 
where such products are solely for the personal consumption of the 
importer or for disposition as his bona fide gift.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 41, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-232, 51 FR 28085, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



  Subpart F--Tobacco Products and Cigarette Papers and Tubes, Imported 
                  Into or Returned to the United States



Sec. 275.81  Taxpayment.

    (a) General. The provisions of this section apply to tobacco 
products, cigarette papers, and cigarette tubes upon which internal 
revenue tax is payable, and which are imported into the United States 
from a foreign country or are brought into the United States from Puerto 
Rico, the Virgin Islands, or a possession of the United States. For 
provisions relating to the importation of previously exported tobacco 
products and cigarette papers and tubes, see section 275.82.
    (b) Method of payment. Except in the case of articles imported or 
brought into the United States under Secs. 275.85 and 275.85a, the 
internal revenue tax must be determined and paid to the Port Director of 
Customs before the tobacco products, cigarette papers, or cigarette 
tubes are removed from customs custody. The tax must be paid on the 
basis of a return on the customs form or by authorized electronic 
transmission by which the tobacco products, cigarette papers, or 
cigarette tubes are duty and tax paid to Customs.
    (c) Required information. When tobacco products, cigarette papers, 
or cigarette tubes enter the United States for consumption, or when they 
are removed for consumption, the importer must include on the customs 
form or authorized electronic transmission the following internal 
revenue tax information.
    (1) For cigarette papers: For cigarette papers imported on or after 
January 1, 2000, the importer will show the total number of cigarette 
papers, the rate of tax, and the amount of tax due. For cigarette papers 
imported prior to January 1, 2000, the importer will show the number of 
books or sets, the number of papers in each book or set, the rate of 
tax, and the amount of tax due.
    (2) For cigarette tubes: The importer will show the number of tubes, 
the rate of tax, and the tax due.
    (3) For cigarettes: The importer will show whether the cigarettes 
are small (class A) or large (class B), the number

[[Page 211]]

of cigarettes, the rate of tax, and the tax due.
    (4) For cigars. The importer will show:
    (i) The number imported under each HTS item number;
    (ii) For large cigars with a sale price of not more than $235.294 
per thousand, the number and total sale price of such cigars;
    (iii) For large cigars with a sale price of more than $235.294 per 
thousand, the number of cigars;
    (iv) The applicable tax rate, as specified by Sec. 275.31; and
    (v) The tax due.
    (5) For smokeless tobacco: The importer will show whether the 
product is chewing tobacco or snuff, the number of pounds and ounces, 
the rate of tax and the tax due.
    (6) For pipe tobacco: The importer will show the designation ``pipe 
tobacco'' or ``Tax Class L,'' the number of pounds and ounces, the rate 
of tax and the tax due.
    (7) For roll-your-own tobacco: The importer will show the 
designation ``roll-your-own'' or ``Tax Class J'', the number of pounds 
and ounces, the rate of tax and the amount of tax due.
    (d) Exceptions. The provisions of this section shall not apply to:
    (1) Tobacco products, cigarette papers, or cigarette tubes released 
from customs custody and transferred in bond to a U.S. manufacturer of 
tobacco products or cigarette papers and tubes (see Secs. 275.85, 
275.85a, or 275.135);
    (2) Puerto Rican products on which the tax is prepaid or deferred 
(see subpart G); and
    (3) Tax payments of cigars from class 6, customs bonded 
manufacturing warehouses (see Sec. 275.151).

(68A Stat. 907, as amended (26 U.S.C. 7652); sec. 202, Pub. L. 85-859, 
72 Stat. 1417 (26 U.S.C. 5703))

[T.D. ATF-27, 41 FR 23951, June 14, 1976, as amended by T.D. ATF-40, 42 
FR 5005, Jan. 26, 1977; T.D. ATF-232, 51 FR 28085, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-246, 52 FR 669, Jan. 8, 
1987; T.D. ATF-284, 54 FR 12190, Mar. 24, 1989; T.D. ATF-289, 54 FR 
48841, Nov. 27, 1989; T.D. ATF-307, 55 FR 52744, Dec. 21, 1990: T.D. 
ATF-421, 64 FR 71924, Dec. 22, 1999; T.D. ATF-424, 64 FR 71932, Dec. 22, 
1999; T.D. ATF-420, 64 FR 71944, Dec. 22, 1999; T.D. ATF-422a, 65 FR 
15059, Mar. 21, 2000]

 Release From Customs Custody of Tobacco Products and Cigarette Papers 
            and Tubes Without Payment of Tax or Certain Duty



Sec. 275.82  Return of exported products.

    (a) The provisions of this section apply to articles imported or 
brought into the United States after December 31, 1999. After such date, 
the importation or bringing in of tobacco products and cigarette papers 
and tubes that were previously exported from the United States is 
restricted. Such products may only be imported or brought into the 
United States by release from customs custody for delivery to a 
manufacturer of tobacco products or cigarette papers or tubes, or to the 
proprietor of an export warehouse. These products are transferred in 
bond and are released from customs custody without payment of that part 
of the duty attributable to internal revenue tax.
    (b) The products described in paragraph (a) of this section may only 
be sold, transferred, or delivered onto the domestic U.S. market by a 
manufacturer of tobacco products after repackaging of the product. For 
the purposes of this subsection, ``repackaging'' shall mean the removal 
of the tobacco product from its original package bearing the export 
marks and placement of the product in a new package. The new packages, 
marks and notices must conform to the requirements of 27 CFR part 270.

[T.D. ATF-421, 64 FR 71924, Dec. 22, 1999]



Sec. 275.83  Penalties and forfeiture for relanded products.

    Except for the return of exported products that are specifically 
authorized under Sec. 275.82:
    (a) Every person who sells, relands, or receives within the 
jurisdiction of the United States any tobacco products or cigarette 
papers or tubes which have been labeled or shipped for exportation;
    (b) Every person who sells or receives such relanded tobacco 
products or cigarette papers or tubes; and,
    (c) Every person who aids or abets in such selling, relanding, or 
receiving, shall, in addition to the tax and any other penalty provided 
for in Title 26 U.S.C., be liable for a penalty equal to

[[Page 212]]

the greater of $1,000 or 5 times the amount of the tax imposed by Title 
26 U.S.C. All tobacco products and cigarette papers and tubes relanded 
within the jurisdiction of the United States, and all vessels, vehicles 
and aircraft used in such relanding or in removing such products, 
papers, and tubes from the place where relanded, shall be forfeited to 
the United States. This section shall apply only to tobacco products, 
cigarette papers and tubes removed after December 31, 1999.

[T.D. ATF-421, 64 FR 71924, Dec. 22, 1999]



Sec. 275.85  Release from customs custody of imported tobacco articles.

    (a) The provisions of this section apply only to tobacco products, 
cigarette papers, and cigarettes tubes, which are not put up in 
packages, i.e., not placed by the manufacturer or importer in packages 
in which the products will be sold to consumers. Tobacco products 
manufactured in a foreign country, the Virgin Islands, or a possession 
of the United States may be released by the Port Director of Customs or 
authorized customs officer from customs custody, without payment of 
internal revenue tax, for transfer to the factory of any manufacturer of 
tobacco products under the internal revenue bond of the manufacturer to 
whom such articles are released. Cigarette papers and tubes manufactured 
in a foreign country, the Virgin Islands, or a possession of the United 
States may be released by the Port Director of Customs or authorized 
customs officer from customs custody, without payment of internal 
revenue tax, for transfer, under the internal revenue bond of the 
manufacturer to whom such articles are released, to the factory of a 
manufacturer of cigarette papers and tubes; or a manufacturer of tobacco 
products solely for use in the manufacture of cigarettes. Releases under 
this section must be in accordance with Sec. 275.86: Provided, however, 
that in the case of products exported from the Virgin Islands, in order 
for a manufacturer of tobacco products or a manufacturer of cigarette 
papers and tubes to remove such products from customs custody in the 
United States under the manufacturer's internal revenue bond without 
payment of internal revenue tax, the manufacturer must file an extension 
of coverage of the internal revenue bond on ATF Form 2105, and receive a 
notice of approval from the appropriate ATF officer. The extension of 
coverage must be executed by the principal and the surety and must be in 
the following form:

    ``Whereas the purpose of this extension is to bind the obligors for 
the purpose of the tax imposed by 26 U.S.C. 7652(b), on tobacco products 
and tubes exported from the Virgin Islands and removed from customs 
custody in the United States without payment of internal revenue tax, 
for delivery to the principal on said bond.''
    ``Now, therefore, the said bond is further specifically conditioned 
that the principal named therein must pay all taxes imposed by 26 U.S.C. 
7652(b) plus penalties, if any, and interest, for which he may become 
liable with respect to these products exported from the Virgin Islands 
and removed from customs custody in the United States without payment of 
internal revenue tax thereon, and must comply with all provision of law 
and regulations with respect thereto.''

    (b) Articles received into the factory of a manufacturer under the 
provision of this section are subject to the provisions of part 270 of 
this chapter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. ATF-422, 64 FR 71949, Dec. 22, 1999]



Sec. 275.85a  Release from customs custody of returned articles.

    (a) Domestically produced tobacco products (classifiable under item 
9801.00.80 of the Harmonized Tariff Schedule of the United States, 19 
U.S.C. 1202) exported from and returned to the United States without 
change to the product or the shipping container may be released, under 
the bond of the manufacturer or export warehouse proprietor to whom such 
articles are released, from customs custody in the United States without 
payment of that part of the duty attributable to the internal revenue 
tax for delivery to the factory of any tobacco products manufacturer or 
to the permit premises of an export warehouse proprietor.
    (b) Domestically produced cigarette papers and tubes (classifiable 
under item 9801.00.80 of the Harmonized Tariff Schedule of the United 
States, 19 U.S.C. 1202) exported from and returned to the United States 
without change to the product or the shipping container

[[Page 213]]

may be released from customs custody in the United States without 
payment of that part of the duty attributable to the internal revenue 
tax for delivery, under the bond of the manufacturer to whom such 
articles are released, to the factory of:
    (1) A manufacturer of cigarette papers and tubes; or
    (2) A manufacturer of tobacco products solely for use in the 
manufacture of cigarettes.
    (c) Releases under this section must be in accordance with the 
procedures set forth in Sec. 275.86. Once released, the tobacco products 
and cigarette papers and tubes will be subject to the tax and all other 
provisions of 26 U.S.C. chapter 52, and, as applicable, subject to the 
provisions of the regulations in part 270 of this chapter as if they had 
not been exported or otherwise removed from internal revenue bond.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. ATF-422, 64 FR 71949, Dec. 22, 1999]



Sec. 275.86  Procedure for release.

    (a) Every manufacturer of tobacco products and cigarette papers and 
tubes and every export warehouse proprietor who desires to obtain the 
release of tobacco products and cigarette papers and tubes from customs 
custody, without payment of internal revenue tax, under its internal 
revenue bond, as provided in Secs. 275.85 or 275.85a, must prepare a 
notice of release, Form 5200.11, in triplicate, and file the three 
copies of the form with the appropriate ATF officer. The appropriate ATF 
officer will not certify Form 5200.11 covering the release of tobacco 
products and cigarette papers and tubes unless the manufacturer is 
authorized, under part 270 of this chapter, to receive, without payment 
of tax, the kinds of articles set forth in the form.
    (b) Importers who are either manufacturers of tobacco products and 
cigarette papers and tubes or export warehouse proprietors, or their 
authorized agents, who request the release of tobacco products or 
cigarette papers and tubes from customs custody in the United States 
under this section, using customs electronic filing procedures, must not 
request such release until they have received the ATF Form 5200.11 
certified by the appropriate ATF officer. Once Customs releases the 
tobacco products or cigarette papers and tubes in accordance with 19 CFR 
Part 143, Customs Directives, and any other applicable instructions, the 
importer will send a copy of the ATF Form 5200.11 along with a copy of 
the electronic filing and customs release to the appropriate ATF officer 
at the address shown thereon. The importer will retain one copy of the 
ATF Form 5200.11 to meet ATF recordkeeping requirements and one copy to 
meet customs recordkeeping requirements.
    (c) Importers or their authorized agents requesting release of 
tobacco products or cigarette papers and tubes from customs custody in 
the United States under any other authorized procedure will submit all 
copies of the ATF Form 5200.11 to the appropriate customs officer along 
with their request for release. The customs officer will verify that the 
ATF Form 5200.11 has been certified by the appropriate ATF officer and 
return all copies to the importer or the importer's authorized 
representative.
    (d) Once Customs releases the tobacco products or cigarette papers 
and tubes in accordance with 19 CFR Part 143, Customs Directives, and 
any other applicable instructions, the importer will send a copy of the 
ATF Form 5200.11 along with a copy of the customs release to the 
appropriate ATF office at the address shown thereon. The importer will 
retain one copy of the ATF Form 5200.11 to meet ATF recordkeeping 
requirements and one copy to meet customs recordkeeping requirements.

(72 Stat. 1418, as amended, 1423, as amended; 26 U.S.C. 5704, 5741)

[T.D. ATF-422, 64 FR 71950, Dec. 22, 1999]



Subpart G--Puerto Rican Tobacco Products and Cigarette Papers and Tubes, 
                     Brought Into the United States



Sec. 275.101  General.

    (a) Tobacco products and cigarette papers and tubes manufactured in 
Puerto Rico which are brought into the United States and withdrawn for 
consumption or sale are subject to the tax

[[Page 214]]

imposed by 26 U.S.C. 7652(a), at the rates set forth in 26 U.S.C. 5701.
    (b) The excise taxes collected on tobacco products and cigarette 
papers and tubes manufactured in Puerto Rico are covered into the 
Treasury of Puerto Rico. Tobacco products and cigarette papers and tubes 
are considered as manufactured in Puerto Rico for purposes of 26 U.S.C. 
7652(a)(3) if the sum of the cost or value of the materials produced in 
Puerto Rico, plus the direct costs of processing operations performed in 
Puerto Rico, equals or exceeds 50 percent of the value of the product 
when it is brought into the United States.
    (c) The excise tax on tobacco products and cigarette papers and 
tubes of Puerto Rican manufacture may be prepaid in Puerto Rico prior to 
shipment of such articles to the United States in accordance with 
Sec. 275.105. In the case of tobacco products such tax may be paid in 
Puerto Rico on the basis of a semi-monthly return in accordance with the 
applicable provisions of this subpart.

(68A Stat. 907, as amended, 72 Stat. 1417, 1418, as amended (26 U.S.C. 
7652, 5703, 5704))

[T.D. ATF-206, 50 FR 15888, Apr. 23, 1985, as amended by T.D. ATF-232, 
51 FR 28085, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, Dec. 1, 1986; T.D. 
ATF-246, 52 FR 669, Jan. 8, 1987; T.D. ATF-422, 64 FR 71950, Dec. 22, 
1999]

   Prepayment of Tax in Puerto Rico on Tobacco products and Cigarette 
                            Papers and Tubes



Sec. 275.105  Prepayment of tax.

    To prepay, in Puerto Rico, the internal revenue tax imposed by 26 
U.S.C. 7652(a), on tobacco products and cigarette paper and tubes of 
Puerto Rican manufacture which are to be shipped to the United States, 
the shipper must file, or cause to be filed, a tax return, ATF Form 
5000.25, with full remittance of tax which will become due on such 
tobacco products and cigarette papers and tubes.

(Approved by the Office of Management and Budget under control number 
1512-0497)

[T.D. ATF-444, 66 FR 13850, Mar. 8, 2001]



Sec. 275.106  Examination and record of shipment by taxpayer.

    (a) Shipments other than noncommercial mail shipment. The taxpayer 
will ensure that the tax has been prepaid on the tobacco products and 
cigarette papers and tubes in each shipment. The taxpayer will identify 
the tobacco products or cigarette papers or tubes on the bill of lading 
or similar record to accompany the shipment with the following 
information:
    (1) The marks and numbers on shipping containers;
    (2) The number of containers;
    (3) The kind of taxable article and the rate of tax, as specified by 
275.30 through 275.35;
    (4) The number of small cigarettes, large cigarettes or small cigars 
to be shipped;
    (5) The number and total sale price of large cigars with a price of 
not more than $235.294 per thousand to be shipped;
    (6) The number of large cigars with a sale price of more than 
$235.294 per thousand to be shipped;
    (7) The pounds and ounces of chewing tobacco or snuff to be shipped;
    (8) The pounds and ounces of pipe tobacco or roll-your-own tobacco 
to be shipped;
    (9) The number of cigarette papers or tubes to be shipped;
    (10) The amount of the tax paid on such articles under the 
provisions of this subpart; and
    (11) The name and address of the consignee in the United States to 
whom such products are being shipped. The taxpayer will note such bills 
of lading or similar records to identify the particular ATF Form 5000.25 
on which taxes have been prepaid.
    (b) Noncommercial mail shipments. Noncommercial mail shipments of 
tobacco products and cigarette papers and tubes to the United States are 
exempt from the provisions of paragraph (a) of this section, except that 
the taxpayer will provide a copy of the ATF Form 5000.25 upon request of 
an appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0560)

[T.D. ATF-444, 66 FR 13850, Mar. 8, 2001]

[[Page 215]]



Secs. 275.107--275.108  [Reserved]

       Deferred Payment of Tax in Puerto Rico on Tobacco Products



Sec. 275.109  Bond required for deferred taxpayment.

    Where a manufacturer of tobacco products in Puerto Rico desires to 
defer payment in Puerto Rico of the internal revenue tax imposed by 26 
U.S.C. 7652(a), on tobacco products of Puerto Rican manufacture coming 
into the United States, he shall file a bond, Form 2986, with the 
regional director (compliance), in accordance with the provisions of 
this subpart. Such bond shall be conditioned on the payment, at the time 
and in the manner prescribed in this subpart, of the full amount of tax 
computed under the provisions of this subpart with respect to tobacco 
products which are released for shipment to the United States on 
computation of tax. All taxes which are computed under the provisions of 
this subpart shall be chargeable against the bond, until such taxes are 
paid, as provided in Sec. 275.112. The bond shall show the location of 
the factory from which the tobacco products to which it relates are to 
be shipped.

[T.D. 6871, 31 FR 43, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28085, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-251, 52 FR 19340, May 22, 1987]



Sec. 275.110  Record of tax computation and shipment by bonded manufacturer under deferred taxpayment.

    Where tobacco products or cigarette papers or tubes are to be 
shipped to the United States involving deferred taxpayment, the bonded 
manufacturer must calculate the tax from the information contained in 
the bill of lading or a similar record. The bonded manufacturer will 
identify each shipment on such record with the following information:
    (a) The marks and numbers on shipping containers;
    (b) The number of containers;
    (c) The kind of taxable article and the rate of tax as specified in 
275.30 through 275.35;
    (d) The number of small cigarettes, large cigarettes or small cigars 
to shipped;
    (e) The number and total sale price of large cigars with a price of 
not more than $235.294 per thousand to be shipped;
    (f) The number of large cigars with a sale price of more than 
$235.294 per thousand to be shipped;
    (g) The pounds and ounces of chewing tobacco or snuff to be shipped;
    (h) The pounds and ounces of pipe tobacco or roll-your-own tobacco 
to be shipped;
    (i) The number of cigarette papers or tubes;
    (j) The amount of the tax to be paid on such articles under the 
provisions of this subpart; and
    (k) The name and address of the consignee in the United States to 
whom such products are being shipped. The date of completing such record 
will be treated as the date of computation of the tax. Tobacco products 
or cigarette papers or tubes may be shipped to the United States in 
accordance with the provisions of this section only after computation of 
the tax.

(Approved by the Office of Management and Budget under control number 
1512-0560)

[T.D. ATF-444, 66 FR 13851, Mar. 8, 2001]



Sec. 275.111  Agreement to Pay Tax.

    Upon shipment of tobacco products and cigarette papers or tubes the 
bonded manufacturer agrees:
    (a) To pay the tax on the shipment;
    (b) That there is no default in payment of tax chargeable against 
the manufacturer's bond on ATF Form 2986 (5210.12); and
    (c) That the amount of the manufacturer's bond is sufficient or in 
the maximum penal sum to cover the tax due on the shipment.

[T.D. ATF-444, 66 FR 13851, Mar. 8, 2001]



Sec. 275.112  Tax return.

    The internal revenue taxes imposed by 26 U.S.C. 7652(a), with 
respect to tobacco products manufactured in Puerto Rico and shipped to 
the United States on computation of tax under the provisions of this 
subpart shall be paid on the basis of a semimonthly tax return.

[[Page 216]]

The bonded manufacturer of such products shall prepare ATF Form 5000.25 
in duplicate, and file the original with the Chief, Puerto Rico 
Operations, and maintain one copy for the file for each semimonthly 
return period. The bonded manufacturer shall execute the return, ATF 
Form 5000.25, under the penalties of perjury. He shall file a return for 
each return period at the time specified in Sec. 275.114, regardless of 
whether tax is due for that return period. However, where the Regional 
Director (compliance), Bureau of Alcohol, Tobacco and Firearms, Atlanta, 
GA, grants specific authorization, the bonded manufacturer need not file 
a tax return during the term of such authorization for any period in 
which tax liability was not incurred under the provisions of this 
subpart.

(Approved by the Office of Management and Budget under control number 
1512-0497)

[T.D. ATF-40, 42 FR 5006, Jan. 26, 1977, as amended by T.D. ATF-125, 48 
FR 2123, Jan. 18, 1983; T.D. ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19340, May 22, 
1987; T.D. ATF-277, 53 FR 45269, Nov. 9, 1988]



Sec. 275.113  Return periods.

    Except as provided by Sec. 275.114, the periods to be covered in the 
semimonthly tax returns shall be from the 1st day through the 15th day 
of each month, and from the 16th day through the last day of each month.

[T.D. ATF-365, 60 FR 33675, June 28, 1995]



Sec. 275.114  Time for filing.

    (a) General rule. Semimonthly tax returns under this subpart shall 
be filed by the bonded manufacturer, for each return period, not later 
than the 14th day after the last day of the return period, except as 
provided by paragraph (b) of this section. The tax shall be paid in full 
by remittance at the time the return is filed as prescribed in 
Sec. 275.115 or Sec. 275.115a.
    (b) Special rule for taxes due for the month of September (effective 
after December 31, 1994). (1) The second semimonthly period for the 
month of September shall be divided into two payment periods, from the 
16th day through the 26th day, and from the 27th day through the 30th 
day. The bonded manufacturer shall file a return on Form 5000.25, and 
make remittance, for the period September 16-26, no later than September 
29. The bonded manufacturer shall file a return on Form 5000.25, and 
make remittance, for the period September 27-30, no later than October 
14.
    (2) Taxpayment not by electronic fund transfer. In the case of taxes 
not required to be remitted by electronic fund transfer as prescribed by 
Sec. 275.115a, the second semimonthly period of September shall be 
divided into two payment periods, from the 16th day through the 25th 
day, and the 26th day through the 30th day. The bonded manufacturer 
shall file a return on Form 5000.25, and make remittance, for the period 
September 16-25, no later than September 28. The bonded manufacturer 
shall file a return on Form 5000.25, and make remittance, for the period 
September 26-30, no later than October 14.
    (3) Amount of payment: Safe harbor rule. (i) Taxpayers are 
considered to have met the requirements of paragraph (b)(1) of this 
section, if the amount paid no later than September 29 is not less than 
11/15 (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (ii) Taxpayers are considered to have met the requirements of 
paragraph (b)(2) of this section, if the amount paid no later than 
September 28 is not less than 2/3rds (66.7 percent) of the tax liability 
incurred for the semimonthly period beginning on September 1 and ending 
on September 15, and if any underpayment of tax is paid by October 14.
    (4) Last day for payment. If the required due date for taxpayment 
for the periods September 16-25 or September 16-26 as applicable, falls 
on a Saturday or legal holiday, the return and remittance shall be due 
on the immediately preceding day. If the required due date falls on a 
Sunday, the return and remittance shall be due on the immediately 
following day.
    (c) Postmark. If the return, and remittance as the case may be, are 
delivered by U.S. Mail to the office of the Chief,

[[Page 217]]

Puerto Rico Operations, the date of the official postmark of the U.S. 
Postal Service stamped on the cover in which the return, and remittance 
as the case may be, were mailed shall be treated as the date of 
delivery.
    (d) Weekends and holidays. Except as provided in paragraph (b)(4) of 
this section, if the due date falls on a Saturday, Sunday, or legal 
holiday, the return and remittance shall be due on the immediately 
preceding day which is not a Saturday, Sunday, or legal holiday.

(Approved by the Office of Management and Budget under control number 
1512-0467)

[T.D. ATF-246, 52 FR 669, Jan. 8, 1987, as amended by T.D. ATF-251, 52 
FR 19340, May 22, 1987; T.D. ATF-365, 60 FR 33675, June 28, 1995; T.D. 
ATF-444, 66 FR 13851, Mar. 8, 2001]



Sec. 275.114a  Qualification for extended deferral.

    Note: This section applies only to removals made before January 1, 
1983.
    (a) Bonded manufacturers with bonds executed before September 1, 
1973. Bonded manufacturers with bonds on Form 2936 executed before 
September 1, 1973, who desire to file returns under this subpart with 
benefit of the extended deferral permitted by Sec. 275.114 shall file 
with the regional director (compliance) an extension of coverage of bond 
on Form 2105. Such extension of coverage shall identify the particular 
bond to which it applies and shall contain a statement of purpose as 
follows:

    To continue in effect said bond (including all extensions or 
limitations of terms and conditions previously consented to and 
approved) notwithstanding that the time for payment of the tax may be 
deferred by the extended deferral period permitted by regulations in 27 
CFR 275.114.


If the bond on Form 2986 is in an amount insufficient to cover an 
extended deferral period, according to the requirements of Sec. 275.121, 
the bonded manufacturer must either file a new bond or file a 
strengthening bond to increase the total amount of the bonds then in 
force to a sufficient amount.
    (b) Bonded manufacturers with bonds executed after September 1, 
1973. Bonded manufacturers operating under original or superseding bonds 
executed after September 1, 1973, are automatically qualified for the 
extended deferral permitted by Sec. 275.114 (unless found in default as 
provided in Sec. 275.116). Such bonds must be executed in an amount 
sufficient to cover an extended deferral period, according to the 
requirements of Sec. 275.121.
    (c) Commencement of extended deferral. Bonded manufacturers may file 
returns with benefit of extended deferral only after the applicable 
bonds and extensions of coverage required by this section have been 
filed with and approved by the regional director (compliance).

(68A Stat. 847, as amended, 907, as amended; 26 U.S.C. 7101, 7652(a); 26 
U.S.C. 7805)

[T.D. ATF-5, 38 FR 19688, July 23, 1973. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; 
T.D. ATF-125, 48 FR 2123, Jan. 18, 1983; T.D. ATF-251, 52 FR 19340, May 
22, 1987]



Sec. 275.115  Remittance with return.

    Remittance of the full amount of internal revenue tax computed 
during the return period shall accompany the return, except as 
prescribed in Sec. 275.115a. Such remittance may be in any form the 
Chief, Puerto Rico Operations is authorized to accept under the 
provisions of Sec. 70.61 of this chapter (Payment by check or money 
order) and which is acceptable to that officer. In paying the tax, a 
fractional part of a cent shall be disregarded unless it amounts to one-
half cent or more, in which case it shall be increased to one cent.

(Aug. 16, 1954, Ch. 736, 68A Stat. 778 (26 U.S.C. 6313) Aug. 16, 1954, 
ch. 736, 68A Stat. 775 (26 U.S.C. 6301); June 29, 1956, ch. 462, 70 
Stat. 391 (26 U.S.C. 6301))

[26 FR 8195, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. ATF-77, 46 
FR 3009, Jan. 13, 1981; T.D. ATF-251, 52 FR 19340, May 22, 1987; T.D. 
ATF-301, 55 FR 47658, Nov. 14, 1990]



Sec. 275.115a  Payment of tax by electronic fund transfer.

    (a) General. (1) Each taxpayer who was liable, during a calendar 
year, for a gross amount equal to or exceeding five million dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes 
combining tax liabilities incurred under this part and part 270 of this 
chapter, shall use a commercial bank in making payment by electronic

[[Page 218]]

fund transfer (EFT) of taxes on tobacco products, cigarette papers, and 
cigarette tubes during the succeeding calendar year. Payment of taxes on 
tobacco products, cigarette papers, and cigarette tubes by cash, check, 
or money order, as described in Sec. 275.115, is not authorized for a 
taxpayer who is required, by this section, to make remittances by EFT. 
For purposes of this section, the dollar amount of tax liability is 
defined as the gross tax liability of all taxes which are paid in 
accordance with this subpart, taxable withdrawals from premises in the 
United States, and importations during the calendar year, without regard 
to any drawbacks, credits, or refunds, for all premises from which such 
activities are conducted by the taxpayer. Overpayments are not taken 
into account in summarizing the gross tax liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (3) A taxpayer who is required by this section to make remittances 
by EFT, shall make a separate EFT remittance and file a separate tax 
return for each factory which tobacco products, or cigarette papers, or 
cigarette tubes are withdrawn upon determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the tax by EFT, each taxpayer 
who was liable for a gross amount equal to or exceeding five million 
dollars in taxes on tobacco products, cigarette papers, and cigarette 
tubes combining tax liabilities incurred under this part and part 270 of 
this chapter during the previous calender year, shall notify, in 
writing, the regional director (compliance), for each region in which 
taxes are paid. The notice shall be an agreement to make remittances by 
EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the taxpayment to the Treasury Account as provided in 
paragraph (e) of this section. The request shall be made to the bank 
early enough for the transfer to be made to the Treasury Account by no 
later than the close of business on the last day for filing the return, 
prescribed in Sec. 275.105 or Sec. 275.114. The request shall take into 
account any time limit established by the bank.
    (3) If a taxpayer was liable for less than five million dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes during 
the preceding calendar year, the taxpayer may choose either to continue 
remitting the tax as provided in this section or to remit the tax with 
the return as prescribed by Sec. 275.115. On the first return on which 
the taxpayer chooses to discontinue remitting the tax by EFT and to 
begin remitting the tax with the tax return, the taxpayer shall notify 
the regional director (compliance) by attaching a written notification 
to the tax return, stating that no taxes are due by EFT, because the tax 
liability during the preceding calendar year was less than five million 
dollars, and that the remittance shall be filed with the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the tax return, 
information about remitting the tax for that return by EFT and shall 
file the return with the Chief, Puerto Rico Operations.
    (2) Remittances shall be considered as made when the taxpayment by 
electronic fund transfer is received by the Treasury Account. For 
purposes of this section, a taxpayment by electronic fund transfer shall 
be considered as received by the Treasury Account when it is paid to a 
Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an electronic fund 
transfer message as required by paragraph (b)(2) of this section, any 
transfer data

[[Page 219]]

record furnished to the taxpayer, through normal banking procedures, 
will serve as the record of payment, and shall be retained as part of 
required records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5761, 6651, or 6656, as applicable, for 
failure to make a taxpayment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the appropriate ATF officer will issue to the taxpayer 
an ATF Procedure entitled, Payment of Tax by Electronic Fund Transfer. 
This publication outlines the procedure a taxpayer is to follow when 
preparing returns and EFT remittances in accordance with this part.

(Approved by the Office of Management and Budget under Control Number 
1512-0457)

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended (26 U.S.C. 5703))

[T.D. ATF-185, 49 FR 37583, Sept. 25, 1984, as amended by T.D. ATF-232, 
51 FR 28086, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-245, 52 FR 534, Jan. 7, 1987; T.D. ATF-251, 52 FR 19340, May 22, 
1987; T.D. ATF-262, 52 FR 47560, Dec. 15, 1987; T.D. ATF-277, 53 FR 
45269, Nov. 9, 1988; T.D. ATF-384, 61 FR 54095, Oct. 17, 1996; T.D. ATF-
422, 64 FR 71951, Dec. 22, 1999]



Sec. 275.116  Default.

    Where a check or money order tendered with a semimonthly return for 
payment of internal revenue tax under the provisions of this subpart is 
not paid on presentment, where a bonded manufacturer fails to remit with 
the semimonthly return the full amount of tax due thereunder, or where a 
bonded manufacturer is otherwise in default in payment of tax under the 
provisions of this subpart, he shall not ship tobacco products to the 
United States on computation of tax, until the regional director 
(compliance) finds that the revenue will not be jeopardized by deferred 
payment of tax under the provisions of this subpart.

[T.D. 6871, 31 FR 44, Jan 4, 1966. Redesignated at 40 FR 16835, Apr. 15, 
1975, and amended by T.D. ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. ATF-
243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19340, May 22, 1987]



Secs. 275.117-275.118  [Reserved]



Sec. 275.119  Corporate surety.

    (a) Surety bonds, required under the provisions of this subpart, may 
be given only with corporate sureties holding certificates of authority 
from the Secretary of the Treasury as acceptable sureties on Federal 
bonds. Limitations concerning corporate sureties are prescribed by the 
Secretary in the current revision of Treasury Department Circular No. 
570 (Companies Holding Certificates of Authority as Acceptable Sureties 
on Federal Bonds and as Acceptable Reinsuring Companies). The surety 
shall have no interest whatever in the business covered by the bond.
    (b) Treasury Department Circular No. 570 is published in the Federal 
Register annually as of the first workday of July. As they occur, 
interim revisions of the circular are published in the Federal Register. 
Copies may be obtained from the Audit Staff, Bureau of Government 
Financial Operations, Department of the Treasury, Washington, DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7))

[T.D. ATF-92, 46 FR 46922, Sept. 23, 1981]



Sec. 275.120  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the manufacturer of tobacco products in 
Puerto Rico may pledge and deposit, as security for his bond, securities 
which are transferrable and are guaranteed both as to interest and as to 
principal by the

[[Page 220]]

United States, in accordance with the provisions of 31 CFR part 225.

(61 Stat. 650; 6 U.S.C. 15)

[T.D. 6871, 31 FR 44, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 275.121  Amount and Account of bond.

    (a) Bond amount. Except for the maximum and minimum amounts stated 
in this paragraph, the total amount of the bond or bonds for tobacco 
products or cigarette papers or tubes under the provisions of this 
subpart must be in an amount not less than the amount of unpaid tax 
chargeable at any one time against the bond. A manufacturer who will 
defer payment of tax for a shipment of tobacco products or cigarette 
papers or tubes under the provisions of this subpart must have 
sufficient credit in this account to cover the taxes prior to making the 
shipment to the United States. The maximum and minimum amounts of such 
bond or bonds are as follows:

------------------------------------------------------------------------
                                            Bond amount     Bond amount
             Taxable article                  maximum         minimum
------------------------------------------------------------------------
(1) Cigarettes..........................        $250,000          $1,000
(2) Any combination of taxable articles.         250,000           1,000
(3) One kind of taxable article other            150,000           1,000
 than cigarettes........................
------------------------------------------------------------------------

    (b) Bond Account. Where the amount of a bonded manufacturer's bond 
is less than the maximum amount prescribed in paragraph (a) of this 
section, a bonded manufacturer must maintain an account reflecting all 
outstanding taxes with which the manufacturer's bond is chargeable. A 
manufacturer must debit such account with the amount of tax that was 
agreed to be paid under Sec. 275.111 or is otherwise chargeable against 
such bond and then must credit the account for the amount paid on Form 
5000.25 or other ATF-prescribed document, at the time it is filed.

(Approved by the Office of Management and Budget under control number 
1512-0560)

[T.D. ATF-444, 66 FR 13851, Mar. 8, 2001]



Sec. 275.122  Strengthening bond.

    Where the amount of any bond is no longer sufficient under the 
provisions of Sec. 275.121, the bonded manufacturer shall immediately 
file a strengthening bond in an appropriate amount with the same surety 
as that on the bond already in effect, unless a superseding bond is 
filed pursuant to Sec. 275.123. A strengthening bond will not be 
approved where any notation is made thereon which is intended, or which 
may be construed, as a release of any former bond, or as limiting the 
amount of either bond to less than its full amount.

[26 FR 8195, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 275.123  Superseding bond.

    A bonded manufacturer shall immediately file a new bond to supersede 
his current bond when (a) the corporate surety on the current bond 
becomes insolvent, (b) the regional director (compliance) approves a 
request from the surety on the current bond to terminate his liability 
under the bond, (c) the payment of any liability under a bond is made by 
the surety thereon, (d) the amount of the bond is no longer sufficient 
under the provisions of Sec. 275.121 and a strengthening bond has not 
been filed, or (e) the regional director (compliance) considers a 
superseding bond necessary for the protection of the revenue.

[26 FR 8195, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19341, May 22, 1987]



Sec. 275.124  Extension of coverage of bond.

    An extension of coverage of the bond of a bonded manufacturer shall 
be required (a) as provided in Sec. 275.114a, and (b) in the case of any 
change in the location of the factory as set forth in the bond. Such 
extension of coverage of the

[[Page 221]]

bond shall be manifested on Form 2105 by the bonded manufacturer and by 
the surety on the bond with the same formality and proof of authority as 
required for the execution of the bond.

[T.D. ATF-5, 38 FR 19689, July 23, 1973. Redesignated at 40 FR 16835, 
Apr. 15, 1975]



Sec. 275.125  Approval of bond and extension of coverage of bond.

    The regional director (compliance) is authorized to approve all 
bonds and extensions of coverage of bonds (except under Sec. 275.136) 
filed under this subpart. No manufacturer of tobacco products in Puerto 
Rico shall defer taxes under this subpart until he receives from the 
regional director (compliance) notice of approval of the bond or of an 
appropriate extension of coverage of the bond required under this 
subpart. Upon receipt of the duplicate copy of an approved bond or 
extension of coverage of bond from the regional director (compliance), 
such copy of the bond or extension of coverage of bond shall be retained 
by the bonded manufacturer and shall be made available for inspection by 
any ATF officer upon his request.

[T.D. 6871, 31 FR 45, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19341, May 22, 
1987]



Sec. 275.126  Termination of bond.

    Any bond given under the provisions of this subpart may be 
terminated as to future transactions, by the regional director 
(compliance), (a) pursuant to application of surety as provided in 
Sec. 275.127; (b) on approval of a superseding bond; (c) on notification 
by the bonded manufacturer to the regional director (compliance) that he 
has discontinued the deferral of taxes under the bond; or (d) on 
notification by the bonded manufacturer to the regional director 
(compliance) that he has discontinued business. When any bond is 
terminated, the regional director (compliance) shall notify both the 
bonded manufacturer and surety on such bond, in writing, of such action.

[26 FR 8196, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19341, May 22, 1987]



Sec. 275.127  Application of surety for relief from bond.

    A surety on any bond given under the provisions of this subpart may 
at any time in writing notify the bonded manufacturer and the regional 
director (compliance) that he desires, after a date named, to be 
relieved of liability under said bond. Such date shall be not less than 
10 days after the date the notice is received by the regional director 
(compliance). The surety shall also file with the regional director 
(compliance) an acknowledgement or other proof of service on the bonded 
manufacturer. If such notice is not thereafter in writing withdrawn, the 
rights of the bonded manufacturer as supported by said bond shall be 
terminated on the date named in the notice, and the surety shall be 
relieved from liability to the extent set forth in Sec. 275.128.

[26 FR 8196, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19341, May 22, 1987]



Sec. 275.128  Relief of surety from bond.

    Where the surety on a bond given under the provisions of this 
subpart has filed application for relief from liability as provided in 
Sec. 275.127, the surety shall be relieved from liability for 
transactions occurring wholly subsequent to the date specified in the 
notice, or the effective date of a new bond, if one is given.

[26 FR 8196, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 275.129  Release of pledged securities.

    Securities of the United States, pledged and deposited as provided 
in Sec. 275.120, shall be released only in accordance with the 
provisions of 31 CFR part 225. Such securities will not be released by 
the regional director (compliance) until the liability under the bond 
for which they were pledged has been terminated. When the regional 
director (compliance) is satisfied that they may be released, he shall 
fix the date or dates on which a part or all of such securities may be 
released. At any time prior to the release of such securities, the 
regional director (compliance) may

[[Page 222]]

extend the date of release for such additional length of time as he 
deems necessary.

(61 Stat. 650; 6 U.S.C. 15)

[26 FR 8196, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19341, May 22, 1987]



Secs. 275.135--275.138  [Reserved]



Sec. 275.139  Records.

    Every manufacturer of tobacco products and cigarette papers and 
tubes in the United States who receives tobacco products or cigarette 
papers or tubes or Puerto Rican manufacture, without payment of internal 
revenue tax, under his bond, shall keep separate records of all items 
received, removed subject to tax, removed for tax-exempt purposes, and 
otherwise disposed of, showing the following information:
    (a) Date, quantity, kind of cigars, cigarettes, smokeless tobacco, 
pipe tobacco and roll-your-own tobacco (number of small cigars--large 
cigars; number of small cigarettes--large cigarettes; pounds and ounces 
of chewing tobacco--snuff; pounds and ounces of pipe tobacco--roll-your-
own tobacco).
    (b) The sale price of large cigars removed subject to tax, except 
that if the price is more than $235.294 per thousand, it may be shown as 
if it were $236 per thousand.
    (c) Cigarette papers:
    (1) Before January 1, 2000, the date and number of books or sets of 
cigarette papers of each numerical content.
    (2) On and after January 1, 2000, the date and number of cigarette 
papers.
    (d) The date and number of cigarette tubes.

(Approved by the Office of Management and Budget under control number 
1512-0362)

(Sec. 2128(c), Pub. L. 94-455, 90 Stat. 1921 (26 U.S.C. 5741))

[T.D. ATF-80, 46 FR 18311, Mar. 24, 1981, as amended by T.D. ATF-172, 49 
FR 14943, Apr. 16, 1984; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-289, 54 FR 48841, Nov. 27, 1989; T.D. ATF-307, 55 FR 52745, Dec. 21, 
1990; T.D. ATF-424, 64 FR 71933, Dec. 22, 1999; T.D. ATF-420, 64 FR 
71944, Dec. 22, 1999]



Sec. 275.140  Taxpayment in the United States.

    Every manufacturer of tobacco products or cigarette papers or tubes 
in the United States who receives Puerto Rican tobacco products or 
cigarette papers or tubes without payment of internal revenue tax, under 
his bond, and subsequently removes such products, subject to tax, must 
pay the tax imposed on such products by 26 U.S.C. 7652(a), at the rates 
prescribed in 26 U.S.C. 5701, on the basis of a return under the 
provisions of part 270 of this chapter applicable to the taxpayment of 
tobacco products. Similarly, every manufacturer of cigarette papers and 
tubes in the United States who receives Puerto Rican cigarette papers 
and tubes and subsequently removes such articles, shall pay the tax 
imposed on such articles by 26 U.S.C. 7652(a), at the rates prescribed 
in 26 U.S.C. 5701, on the basis of a return under the provisions of part 
270 of this chapter applicable to taxpayment of cigarette papers and 
tubes. Such tobacco products and cigarettes papers and tubes shall be 
separately listed and identified as articles of Puerto Rican manufacture 
on Form 5000.24. The amount of tax paid on such articles shall be 
separately stated on Form 5000.24.

[T.D. 6871, 31 FR 45, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-384, 61 FR 54095, Oct. 17, 1996; T.D. ATF-424, 64 FR 
71933, Dec. 22, 1999; T.D. ATF-422, 64 FR 71951, Dec. 22, 1999]



Sec. 275.141  Reports.

    Every manufacturer of tobacco products or cigarette papers or tubes 
in the United States who receives Puerto Rican tobacco products, or 
cigarette papers or tubes without payment of internal revenue tax, under 
his bond, must report the receipt and disposition of such tobacco 
products and cigarette papers and tubes on supplemental monthly reports. 
Such supplemental reports shall be made on Form 5210.5 or Form 2138 and 
shall have inserted thereon the heading, ``Cigars and Cigarettes of 
Puerto Rican Manufacture'' or ``Cigarette Papers and Tubes of Puerto 
Rican Manufacture,'' as the case may be. The original of such 
supplemental report shall be attached to

[[Page 223]]

the manufacturer's regular monthly report when filed.

(72 Stat. 1422; 26 U.S.C. 5722)

[T.D. 6871, 31 FR 46, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 1999; T.D. ATF-
422, 64 FR 71951, Dec. 22, 1999]



                          Subpart H [Reserved]



Secs. 275.151-275.153  [Reserved]



                            Subpart I--Claims

                                 General



Sec. 275.161  Abatement of assessment.

    A claim for abatement of the unpaid portion of the assessment of any 
tax on tobacco products and cigarette papers and tubes, or any liability 
in respect thereof, may be allowed to the extent that such assessment is 
excessive in amount, is assessed after expiration of the applicable 
period of limitation, or is erroneously or illegally assessed. Any claim 
under this section shall be prepared on Form 2635 (5620.8), in 
duplicate, and shall set forth the particulars under which the claim is 
filed. The original of the claim, accompanied by such evidence as is 
necessary to establish to the satisfaction of the regional director 
(compliance) that the claim is valid, shall be filed with the regional 
director (compliance) for the region in which the tax or liability was 
assessed, and the duplicate of the claim shall be retained by the 
claimant.

(68A Stat. 792; 26 U.S.C. 6404)

[T.D. 6871, 31 FR 46, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19341, May 22, 
1987]



Sec. 275.162  Losses caused by disaster occurring after September 2, 1958.

    Claims involving internal revenue tax paid or determined and customs 
duty paid on tobacco products and cigarette papers and tubes removed, 
which are lost, rendered unmarketable, or condemned by a duly authorized 
official by reason of a ``major disaster'' occurring in the United 
States after September 2, 1958, shall be filed in accordance with the 
provisions of subpart C of part 296 of this chapter.

(72 Stat. 1420; 26 U.S.C. 5708)

[T.D. 6871, 31 FR 46, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 275.163  Refund of tax.

    The taxes paid on tobacco products and cigarette papers and tubes 
imported or brought into the United States may be refunded (without 
interest) to the taxpayer on proof satisfactory to the regional director 
(compliance) that the taxpayer has paid the tax on tobacco products and 
cigarette papers and tubes lost (otherwise than by theft) or destroyed, 
by fire, casualty, or act of God, while in the possession or ownership 
of such taxpayer, or withdrawn by him from the market. Any claim for 
refund of tax under this section shall be prepared on Form 2635 
(5620.8), in duplicate, and shall include a statement that the tax 
imposed on tobacco products and cigarette papers and tubes by 26 U.S.C. 
7652 or chapter 52, as applicable, has been paid in respect to the 
articles covered in the claim, and that the articles were lost, 
destroyed, or withdrawn from the market, within six months preceding the 
date the claim is filed and shall be executed under the penalties of 
perjury. A claim for refund relating to articles lost or destroyed shall 
be supported as prescribed in Sec. 275.165, and a claim relating to 
articles withdrawn from the market shall include a schedule prepared and 
verified as prescribed in Secs. 275.170 and 275.171 or Secs. 275.172 and 
275.173. The original of the claim shall be filed with the regional 
director (compliance) for the region in which the tax was paid, or, 
where the tax was paid in more than one region, with the regional 
director (compliance) for any one of the regions in which the tax was 
paid. The duplicate of the claim, with the copy of any verified 
supporting

[[Page 224]]

schedules, shall be retained by the claimant.

(68A Stat. 907, as amended, 72 Stat. 1419, as amended; 26 U.S.C. 7652, 
5705)

[T.D. 6871, 31 FR 46, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, Dec. 1, 
1986; T.D. ATF-251, 52 FR 19341, May 22, 1987]

    Tobacco Products and Cigarette Papers and Tubes Lost or Destroyed



Sec. 275.165  Action by taxpayer.

    Where tobacco products and cigarette papers and tubes which have 
been imported or brought into the United States are lost (otherwise than 
by theft) or destroyed, by fire, casualty, or act of God, and the 
taxpayer desires to file claim for refund of the tax on such articles, 
he shall, in addition to complying with the requirements of 
Sec. 275.163, indicate on the claim the nature, date, place, and extent 
of such loss or destruction. The claim shall be accompanied by such 
evidence as is necessary to establish to the satisfaction of the 
regional director (compliance) that the claim is valid.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6871, 31 FR 46, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28086, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

   Tobacco Products and Cigarette Papers and Tubes Withdrawn From the 
                                 Market



Sec. 275.170  Reduction of tobacco products to materials; ATF action.

    (a) General. Where tobacco products and cigarette papers and tubes 
which have been imported or brought into the United States are withdrawn 
from the market and the taxpayer desires to file claim for refund of the 
tax on the articles, he shall, in addition to the requirements of 
Sec. 275.163, assemble the articles at any suitable place, if they are 
to be destroyed or reduced to tobacco. The taxpayer shall group the 
articles according to the rates of tax applicable to the articles, and 
shall prepare a schedule of the articles on ATF Form 5200.7, in 
triplicate. All copies of the schedule shall be forwarded to the 
regional director (compliance) for the region in which the tobacco 
products and cigarette papers and tubes are assembled.
    (b) Large cigars. Refund or credit of tax on large cigars withdrawn 
from the market is limited to the lowest tax applicable to that brand 
and size of cigar during the required record retention period (see 
Sec. 275.22) except where the importer establishes that a greater amount 
was actually paid. For each claim involving large cigars withdrawn from 
the market, the importer must include a certification on either ATF Form 
5200.7 or ATF Form 2635 (5620.8) to read as follows:

    The amounts claimed relating to large cigars are based on the lowest 
sale price applicable to the cigars during the required record retention 
period, except where specific documentation is submitted with the claim 
to establish that any greater amount of tax claimed was actually paid.


(See 26 U.S.C. 5705)

[T.D. ATF-80, 46 FR 18311, Mar. 24, 1981, as amended by T.D. ATF-232, 51 
FR 28086, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-251, 52 FR 19341, May 22, 1987; T.D. ATF-307, 55 FR 52745, Dec. 21, 
1990; T.D. ATF-424, 64 FR 71933, Dec. 22, 1999; T.D. ATF-420, 64 FR 
71944, Dec. 22, 1999]



Sec. 275.171  Reduction of tobacco products to materials, action by regional director (compliance).

    Upon receipt of a schedule of tobacco products and cigarette papers 
and tubes which have been imported or brought into the United States and 
which are withdrawn from the market by a taxpayer who desires to destroy 
such articles or, in the case of tobacco products, reduce them to 
tobacco, the regional director (compliance) may assign an ATF officer to 
verify the schedule and supervise destruction of the articles (and 
stamps, if any) or the reduction of tobacco products to tobacco, or the 
regional director (compliance) may authorize the taxpayer to destroy the 
articles (and stamps, if any) or reduce tobacco products to tobacco 
without

[[Page 225]]

supervision by so stating on the original and one copy of the schedule 
returned to the taxpayer.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6871, 31 FR 46, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28087, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 275.172  Return to nontaxpaid status, action by taxpayer.

    (a) General. Where tobacco products and cigarette papers and tubes 
which have been imported or brought into the United States are withdrawn 
from the market and the taxpayer desires to file a claim for refund of 
the tax on the articles and return them to a nontaxpaid status, he 
shall, in addition to the requirements of Sec. 275.163, assemble the 
articles in or adjacent to the factory in which the articles are to be 
retained or received in a nontaxpaid status. The taxpayer shall group 
the articles according to the rates of tax applicable to the articles, 
and shall prepare a schedule of the articles, on Form 5200.7, in 
triplicate. All copies of the schedule shall be forwarded to the 
regional director (compliance) for the region in which the tobacco 
products and cigarette papers and tubes are assembled.
    (b) Large cigars. Refund or credit of tax on large cigars withdrawn 
from the market is limited to the lowest tax applicable to that brand 
and size of cigar during the required record retention period (see 
Sec. 275.22) except where the importer establishes that a greater amount 
was actually paid. For each claim involving large cigars withdrawn from 
the market, the importer must include a certification on either ATF Form 
5200.7 or ATF Form 2635 (5620.8) to read as follows:

    The amounts claimed relating to large cigars are based on the lowest 
sale price applicable to the cigars during the required record retention 
period, except where specific documentation is submitted with the claim 
to establish that any greater amount of tax claimed was actually paid.


(See 26 U.S.C. 5705)

[T.D. ATF-80, 46 FR 18311, Mar. 24, 1981, and amended by T.D. ATF-232, 
51 FR 28087, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-251, 52 FR 19341, May 22, 1987; T.D. ATF-307, 55 FR 52745, Dec. 21, 
1990; T.D. ATF-424, 64 FR 71933, Dec. 22, 1999; T.D. ATF-420, 64 FR 
71944, Dec. 22, 1999]



Sec. 275.173  Return to nontaxpaid status, action by regional director (compliance).

    Upon receipt of a schedule of tobacco products and cigarette papers 
and tubes which have been imported or brought into the United States and 
which are withdrawn from the market by a taxpayer who desires to return 
such articles to a nontaxpaid status, the regional director (compliance) 
may assign an ATF officer to verify the schedule and supervise 
disposition of the articles (and destruction of the stamps, if any) or 
the regional director (compliance) may authorize the receiving 
manufacturer to verify the schedule and disposition of the articles (and 
destruction of the stamps, if any) covered therein, without supervision, 
by so stating on the original and one copy of the schedule returned to 
the manufacturer. Where the receipt in a factory of tobacco products and 
cigarette papers and tubes has been verified, such articles shall be 
treated by the receiving manufacturer as nontaxpaid and shall be covered 
by the manufacturer's bond.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6871, 31 FR 47, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28087, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 275.174  Disposition of tobacco products and cigarette papers and tubes, and schedule.

    When an ATF officer is assigned to verify the schedule and supervise 
destruction or other disposition of tobacco products and cigarette 
papers

[[Page 226]]

and tubes which have been imported or brought into the United States, 
such officer shall, upon completion of his assignment, execute a 
certificate on all copies of the schedule to show the disposition and 
the date of disposition of such articles. The ATF officer shall return 
the original and one copy of the certified schedule to the taxpayer. 
When a taxpayer destroys such articles (and stamps, if any) or reduces 
tobacco products to materials, or a receiving manufacturer verifies the 
schedule and disposition of such articles (and stamps, if any), he shall 
execute a certificate on the original and the copy of the schedule 
returned to him, to show the disposition and the date of disposition of 
the articles. The taxpayer shall attach the original of the certified 
schedule to his claim for refund.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6871, 31 FR 47, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28087, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



                     Subpart J--Records and Reports

    Source: T.D. ATF-40, 42 FR 5007, Jan. 26, 1977, unless otherwise 
noted.



Sec. 275.181  Records of large cigars.

    Every person who imports large cigars for sale within the United 
States must keep such records as are necessary to establish and verify 
the sale price that applies to large cigars removed (entered or 
withdrawn).
    (a) Basic record. The importer must keep a record to show each sale 
price (as determined under Sec. 275.39), which is applicable to large 
cigars removed. No later than the tenth business day in January of each 
year the importer must prepare such a record to show the sale price in 
effect on the first day of that year for each brand and size of large 
cigars. The importer must note any change in a price from that shown in 
the record within ten business days after such change in price. The 
record must be a continuing one for each brand and size of cigar (and 
type of packaging, if pertinent), so that the taxable price on any date 
may be readily ascertained. If an importer removes new types of large 
cigars after the beginning of the year, the importer must enter the sale 
price and its effective date for such large cigars in the basic record 
within ten business days after such removal.
    (b) Copies of price announcements. The importer must keep a copy of 
each general announcement that is issued internally or to the trade 
about establishment or change of large cigar sale prices. If the copy 
does not show the actual date when issued it must be annotated to show 
this information.
    (c) Copies of entry and withdrawal forms. The importer must keep a 
copy of each customs entry or withdrawal form on which internal revenue 
tax for large cigars is declared pursuant to Sec. 275.81.
    (d) Alternative record. If an importer has so few import 
transactions and/or brands and sizes of large cigars that retention of 
an appropriate copy of each entry and withdrawal form required under 
paragraph (c) of this section will provide an adequate record of sale 
prices, then the record required under paragraph (a) of this section 
need not be kept. In such case the entry and withdrawal forms must 
identify the brands and sizes of cigars covered and show the 
corresponding quantity and sale price for each. If such information was 
not originally entered on the form it may be included by annotation. 
Whenever the appropriate ATF officer finds that alternative records 
being kept pursuant to this paragraph are inadequate for the intended 
purpose, he or she may so notify the importer in writing, after which 
time the importer must keep the record required under paragraph (a) of 
this section.

(Approved by the Office of Management and Budget under control number 
1512-0368)

[T.D. ATF-420, 64 FR 71944, Dec. 22, 1999]



Sec. 275.182  Availability of records.

    The records required under Sec. 275.181 shall be kept by the 
importer at his usual place of business unless otherwise authorized in 
writing by the regional director (compliance), and shall be made 
available for inspection by any ATF officer upon his request. (For 
retention period, see Sec. 275.22.)

[[Page 227]]



Sec. 275.183  [Reserved]



                  Subpart K--Tobacco Products Importers

    Source: T.D. ATF-422, 64 FR 71951, Dec. 22, 1999, unless otherwise 
noted.



Sec. 275.190  Persons required to qualify.

    Any person who engages in the business as an importer of tobacco 
products must qualify as an importer of tobacco products in accordance 
with the provisions of this part. Any person eligible for the exemption 
in Sec. 275.50 is not engaged in the business as an importer of tobacco 
products.
    Persons importing tobacco products and cigarette papers and tubes 
for personal use, in such quantities as may be allowed by Customs 
without payment of tax, do not require an importer's permit.



Sec. 275.191  Application for permit.

    Except as provided in Sec. 275.192, every person, before commencing 
business as an importer of tobacco products as defined in Sec. 275.11, 
must make application for, and obtain, the permit provided by this 
subpart K. Such application must be made on ATF Form 5230.4, according 
to the instructions for the form. All documents required under this part 
to be furnished with such application must be made a part thereof.



Sec. 275.192  Transitional rule.

    Any person who--
    (a) Was engaged in the business as an importer of tobacco products 
before January 1, 2000, and
    (b) Who files an application with ATF before January 1, 2000, may 
continue to import tobacco products and cigarette papers and tubes 
pending action on their application by ATF. Pending such final action, 
all provisions of chapter 52 of the Internal Revenue Code of 1986 will 
apply to such applicant.



Sec. 275.193  Corporate documents.

    Every corporation, before commencing business as an importer of 
tobacco products, must furnish with its application for permit, required 
by Sec. 275.191, a true copy of the corporate charter or a certificate 
of corporate existence or incorporation executed by the appropriate 
officer of the State in which incorporated. The corporation must 
likewise furnish duly authenticated extracts of the stockholders' 
meetings, bylaws, or directors' meetings, listing the offices the 
incumbents of which are authorized to sign documents or otherwise act in 
behalf of the corporation in matters relating to 26 U.S.C. chapter 52, 
and regulations issued thereunder. The corporation must also furnish 
evidence, in duplicate, of the identity of the officers and directors 
and each person who holds more than ten percent of the stock of such 
corporation. Where any of the information required by this section has 
previously been filed with the appropriate ATF officer, and such 
information is currently complete and accurate, a written statement to 
that effect, in duplicate, will be sufficient for the purpose of this 
section.



Sec. 275.194  Articles of partnership or association.

    Every partnership or association, before commencing business as an 
importer of tobacco products, must furnish with its application for 
permit required by Sec. 275.191 a true copy of the articles of 
partnership or association, if any, or certificate of partnership or 
association where required to be filed by any State, county, or 
municipality. Where a partnership or association has previously filed 
such documents with the appropriate ATF officer and such documents are 
currently complete and accurate, a written statement, in duplicate, to 
that effect by the partnership or association will be sufficient for the 
purpose of this section.



Sec. 275.195  Trade name certificate.

    Every person, before commencing business under a trade name as an 
importer of tobacco products, must furnish with his application for a 
permit, required by Sec. 275.191, a true copy of the certificate or 
other document, if any, issued by a State, county, or municipal 
authority in connection with the transaction of business under such 
trade name. If no such true copy of the certificate or other document is 
so required, a written statement, in duplicate, to that effect by such 
person will

[[Page 228]]

be sufficient for the purpose of this section.



Sec. 275.196  Power of attorney.

    If the application for permit or any report, return, notice, 
schedule, or other document required to be executed is to be signed by 
an individual (including one of the partners for a partnership or one of 
the members of an association) as an attorney in fact for any person, or 
if an individual is to otherwise officially represent such person, power 
of attorney on Form 1534 must be furnished to the appropriate ATF 
officer. (For power of attorney in connection with conference and 
practice requirements see subpart E, part 70 of this chapter.) Such 
power of attorney is not required for persons whose authority is 
furnished with the corporate documents as required by Sec. 275.194. Form 
1534 does not have to be filed again with the appropriate ATF officer if 
such form has previously been submitted to ATF and is still in effect.



Sec. 275.197  Additional information.

    The appropriate ATF officer may require such additional information 
as may be deemed necessary to determine whether the applicant is 
entitled to a permit under the provisions of this part. The applicant 
must, when required by the appropriate ATF officer, furnish as a part of 
his application for such permit such additional information as the 
appropriate ATF officer deems necessary to determine whether the 
applicant is entitled to a permit.



Sec. 275.198  Investigation of applicant.

    Appropriate ATF officers may inquire or investigate to verify the 
information in connection with an application for a permit. The 
investigation will ascertain whether the applicant is, by reason of his 
business experience, financial standing, and trade connections, likely 
to maintain operations in compliance with 26 U.S.C. chapter 52, and 
regulations thereunder; whether the applicant has disclosed all material 
information required, or whether the applicant has made any material 
false statement in the application for such permit.



Sec. 275.199  Notice of contemplated disapproval.

    If the appropriate ATF officer has reason to believe that the 
applicant is not entitled to a permit, the appropriate ATF officer will 
promptly give to the applicant a notice of the contemplated disapproval 
of the application and opportunity for hearing thereon in accordance 
with part 200 of this chapter. If, after such notice and opportunity for 
hearing, the appropriate ATF officer finds that the applicant is not 
entitled to a permit, an order will be prepared stating the findings on 
which the permit request is denied.



Sec. 275.200  Issuance of permit.

    If the application for permit, together with the required supporting 
documents, is approved, the appropriate ATF officer will issue a permit 
on ATF F 5200.24 to the applicant as an importer of tobacco products.



Sec. 275.201  Duration of permit.

    (a) Permits other than temporary permits issued under paragraph (b) 
of this section will be valid for a period of three years from the 
effective date shown on the permit, ATF F 5200.24.
    (b) Temporary permits will be issued for a one-year period to those 
applicants described in Sec. 275.192.



Sec. 275.202  Renewal of permit.

    Importers wishing to continue operations beyond the expiration of 
their current permit must renew their permit by making application 
within 30 days of such expiration on ATF F 5200.24, in accordance with 
instructions for the form. The expiring permit will continue in effect 
until final action is taken by ATF on the application for renewal, 
provided a timely application for renewal is filed.



Sec. 275.203  Retention of permit and supporting documents.

    The importer must retain the permit, together with the copy of the 
application and supporting documents returned with the permit, at the 
same place where the records required by this part are kept. The permit 
and supporting documents must be made available for inspection by any 
appropriate ATF officer upon request.

[[Page 229]]

                      Required Records and Reports



Sec. 275.204  General.

    Every tobacco products importer must keep such records and, when 
required by this part, submit such reports, of the physical receipt and 
disposition of tobacco products. Records and reports will not be 
required under this part with respect to tobacco products while in 
customs custody.



Sec. 275.205  Recordkeeping requirements.

    Any owner, importer, consignee, or their agent who imports, or 
knowingly causes to be imported, any tobacco product or cigarette papers 
or tubes must make and keep records. A person purchasing a tobacco 
product from the importer in a domestic transaction and who does not 
knowingly cause merchandise to be imported is not required to make and 
keep records unless:
    (a) The terms and conditions of the importation are controlled by 
the person placing the order with the importer (e.g., the importer is 
not an independent contractor but the agent of the person placing the 
order).
    (b) The tobacco products purchased from the importer include more 
than 60,000 cigarettes, in which case the importer and the person 
placing the order with the importer must keep the records required by 27 
CFR Part 296, Subpart F, Distribution of Cigarettes. Dividing a single 
shipment of more than 60,000 cigarettes into smaller components of 
60,000 cigarettes or less does not exempt any person from the 
recordkeeping requirements of this subpart.

               Filing and Retention of Records and Reports



Sec. 275.206  Reports.

    (a) Importers must file a monthly report on ATF F 5220.6 in 
accordance with the format and instructions for the form.
    (b) The first report(s) must be submitted by the 15th day of the 
month following the month in which the permit is issued; all previous 
months beginning January 1, 2000, must also be reported at that time.

For example:

    An importer who is issued a permit with a date of August 17, 2000, 
would be required to submit by September 15, 2000, a total of eight 
reports for the months January-August, 2000.

    (c) Reports with the notation ``No Activity'' must be made for those 
months in which no activity occurs.
    (d) When a transfer of ownership of the business of an importer of 
tobacco products described in Sec. 275.224, or when a change in control 
of a corporation described in Sec. 275.226 occurs, a concluding report 
with the notation ``Concluding Report'' must be made for the month or 
partial month during which the transfer of ownership or change in 
control becomes effective.



Sec. 275.207  Filing.

    All records and reports required by this part will be maintained 
separately, chronologically by transaction or reporting date, at the 
importer's place of business. The appropriate ATF officer may, pursuant 
to an application, authorize files, or an individual file, to be 
maintained at another business location under the control of the 
importer, if the alternative location does not cause undue inconvenience 
to ATF or Customs officers desiring to examine the files or delay in the 
timely transmittal of any documents required to be submitted.



Sec. 275.208  Retention.

    (a) All records and reports required by this part, documents or 
copies of documents supporting these records or reports, and file copies 
of reports required by this part to be submitted to ATF must be retained 
for not less than three years following the close of the calendar year 
in which filed or made, and during this period must be available for 
inspection and copying by ATF during business hours.
    (b) Furthermore, the appropriate ATF officer may require these 
records to be kept for an additional period of not more than three years 
in any case where it is determined that such record retention is 
necessary to protect the revenue. Any records, or copies thereof, 
containing any of the information required by this part to be prepared, 
wherever kept, must also be made available for inspection and copying.

[[Page 230]]



      Subpart L--Changes After Original Qualification of Importers

    Source: T.D. ATF-422, 64 FR 71953, Dec. 22, 1999, unless otherwise 
noted.

                             Changes in Name



Sec. 275.220  Change in individual name.

    Where there is a change in the name of an individual operating as an 
importer of tobacco products, the importer must make application on ATF 
Form 5230.5 for an amended permit within 30 days of such change.



Sec. 275.221  Change in trade name.

    Where there is a change in, or an addition or discontinuance of, a 
trade name used by an importer of tobacco products in connection with 
operations authorized by the permit, the importer must make application 
on ATF Form 5230.5 for an amended permit to reflect such change within 
30 days of such change. The importer must also furnish a true copy of 
any new trade name certificate or document issued to the business, or 
statement in lieu thereof, required by Sec. 275.195.



Sec. 275.222  Change in corporate name.

    Where there is a change in the corporate name of an importer of 
tobacco products, the importer must make application on ATF Form 5230.5 
for an amended permit within 30 days of such change. The importer must 
also furnish such documents as may be necessary to establish that the 
corporate name has been changed.

                    Changes in Ownership and Control



Sec. 275.223  Fiduciary successor.

    If an administrator, executor, receiver, trustee, assignee, or other 
fiduciary, is to take over the business of an importer of tobacco 
products, as a continuing operation, such fiduciary must make 
application for permit, before commencing operations as required by 
subpart K of this part, furnish certified copies, in duplicate, of the 
order of the court, or other pertinent documents, showing his 
appointment and qualification as such fiduciary. However, where a 
fiduciary intends only to liquidate the business, qualification as an 
importer of tobacco products will not be required if the fiduciary 
promptly files with the appropriate ATF officer a written statement to 
that effect.



Sec. 275.224  Transfer of ownership.

    If a transfer is to be made in ownership of the business of an 
importer of tobacco products (including a change of any member of a 
partnership or association), such importer must give notice, in writing, 
to the appropriate ATF officer, naming the proposed successor and the 
desired effective date of such transfer. The proposed successor must 
qualify as an importer of tobacco products, before commencing 
operations, in accordance with the applicable provisions of subpart K of 
this part. The importer must give such notice of transfer, and the 
proposed successor must make application for permit in ample time for 
examination and approval thereof before the desired date of such change. 
The predecessor must make a concluding report, in accordance with the 
provisions of Sec. 275.205, and surrender the permit with such report. 
The successor must make a commencing report, in accordance with the 
provisions of Sec. 275.206.



Sec. 275.225  Change in officers, directors, or stockholders of a corporation.

    Upon election or appointment (excluding successive reelection or 
reappointment) of any officer or director of a corporation operating the 
business of an importer of tobacco products, or upon any occurrence 
which results in a person acquiring ownership or control of more than 
ten percent in aggregate of the outstanding stock of such corporation, 
the importer must, within 30 days of such action, so notify the 
appropriate ATF officer in writing, giving the identity of such person. 
In the event that the acquisition of ten or more percent in aggregate of 
the outstanding stock of such corporation results in a change of control 
of such corporation, the provisions of Sec. 275.226 will apply. When 
there is any change in the authority furnished under Sec. 275.196 for 
officers to act on behalf of the corporation the importer must 
immediately so notify the appropriate ATF officer in writing.

[[Page 231]]



Sec. 275.226  Change in control of a corporation.

    Where the issuance, sale, or transfer of the stock of a corporation 
operating as an importer of tobacco products results in a change in the 
identity of the principal stockholders exercising actual or legal 
control of the operations of the corporation, the corporate importer 
must make application on ATF Form 5230.4 for a new permit within 30 days 
after the change occurs. Otherwise, the present permit will be 
automatically terminated at the expiration of such 30-day period, and 
the importer will dispose of all tobacco products on hand, in accordance 
with this part, make a concluding report, in accordance with the 
provisions of Sec. 275.206, and surrender his permit with such report. 
If the application for a new permit is timely made, the present permit 
will continue in effect pending final action with respect to such 
application.

                     Changes in Location or Address



Sec. 275.227  Change in location.

    Whenever an importer of tobacco products intends to relocate the 
principal business office, the importer must, before commencing 
operations at the new location, make application on ATF Form 5230.5 for, 
and obtain, an amended permit.



Sec. 275. 228  Change in address.

    Whenever any change occurs in the address, but not the location, of 
the principal business office of an importer of tobacco products, as a 
result of action of local authorities, the importer must make 
application on ATF Form 5230.5 for an amended permit within 30 days of 
such change.

                           PART 285 [RESERVED]



PART 290--EXPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, OR WITH DRAWBACK OF TAX--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
290.1  Exportation of tobacco products, and cigarette papers and tubes, 
          without payment of tax, or with drawback of tax.
290.2  Forms prescribed.

                         Subpart B--Definitions

290.11  Meaning of terms.

                Subpart Ba--Special (Occupational) Taxes

290.31  Liability for special tax.
290.32  Rate of special tax.
290.33  Special tax returns.
290.34  Employer identification number.
290.35  Issuance, distribution, and examination of special tax stamps.
290.36  Changes in special tax stamps.

                           Subpart C--General

290.61  Removals, withdrawals, and shipments authorized.
290.61a  Deliveries to foreign-trade zones--export status.
290.62  Restrictions on deliveries of tobacco products, and cigarette 
          papers and tubes to vessels and aircraft, as supplies.
290.63  Restrictions on disposal of tobacco products, and cigarette 
          papers and tubes on vessels and aircraft.
290.64  Responsibility for delivery or exportation of tobacco products, 
          and cigarette papers and tubes.
290.65  Liability for tax on tobacco products, and cigarette papers and 
          tubes.
290.66  Relief from liability for tax.
290.67  Payment of tax.
290.68  [Reserved]
290.69  Assessment.
290.70  Authority of ATF officers to enter premises.
290.71  Interference with administration.

                      Variations From Requirements

290.72  Alternate methods or procedures.
290.73  Emergency variations from requirements.

[[Page 232]]

 Subpart D--Qualification Requirements for Export Warehouse Proprietors

290.81  Persons required to qualify.
290.82  Application for permit.
290.83  Corporate documents.
290.84  Articles of partnership or association.
290.85  Trade name certificate.
290.86  Bond.
290.87  Power of attorney.
290.88  Description and diagram of premises.
290.89  Separation of premises.
290.90  Restrictions relating to export warehouse premises.
290.91  Additional information.
290.92  Investigation of applicant.
290.93  Issuance of permit.

   Subpart E--Changes Subsequent to Original Qualification of Export 
                          Warehouse Proprietors

                             Changes in Name

290.101  Change in individual name.
290.102  Change in trade name.
290.103  Change in corporate name.

                    Changes in Ownership and Control

290.104  Fiduciary successor.
290.105  Transfer of ownership.
290.106  Change in officers or directors of a corporation.
290.107  Change in stockholders of a corporation.

                    Changes in Location and Premises

290.108  Change in location within same region.
290.109  Change in address.
290.110  Change in location to another region.
290.111  Change in export warehouse premises.
290.112  Emergency premises.

          Subpart F--Bonds and Extensions of Coverage of Bonds

290.121  Corporate surety.
290.122  Deposits of bonds, notes, or obligations in lieu of corporate 
          surety.
290.123  Amount of bond.
290.124  Strengthening bond.
290.125  Superseding bond.
290.126  Extension of coverage of bond.
290.127  Approval of bond and extension of coverage of bond.
290.128  Termination of liability of surety under bond.
290.129  Release of bonds, notes, and obligations.

          Subpart G--Operations by Export Warehouse Proprietors

290.141  Sign.
290.142  Records.

                               Inventories

290.143  General.
290.144  Opening.
290.145  Special.
290.146  Closing.

                                 Reports

290.147  General.
290.148  Opening.
290.149  Monthly.
290.150  Special.
290.151  Closing.

                                 Claims

290.152  Claim for remission of tax liability.
290.153  Claim for abatement of assessment.
290.154  Claim for refund of tax.

         Subpart H--Suspension and Discontinuance of Operations

290.161  Discontinuance of operations.
290.162  Suspension and revocation of permit.

Subpart I [Reserved]

Subpart J--Removal of Shipments of Tobacco Products and Cigarette Papers 
       and Tubes by Manufacturers and Export Warehouse Proprietors

                         Packaging Requirements

290.181  Packages.
290.182  Lottery features.
290.183  Indecent or immoral material.
290.184  Mark.
290.185  Label or notice.
290.186  Tax classification for cigars.
290.187  Shipping containers.

                         Consignment of Shipment

290.188  General.
290.189  Transfers between factories and export warehouses.
290.190  Return of shipment to a manufacturer or customs warehouse 
          proprietor.
290.191  To officers of the armed forces for subsequent exportation.
290.192  To vessels and aircraft for shipment to noncontiguous foreign 
          countries and possessions of the United States.
290.193  To a Federal department or agency.
290.194  To district director of customs for shipment to contiguous 
          foreign countries.
290.195  To Government vessels and aircraft for consumption as supplies.
290.196  To district director of customs for consumption as supplies on 
          commercial vessels and aircraft.
290.196a  To a foreign-trade zone.
290.197  For export by parcel post.

[[Page 233]]

                      Notice of Removal of Shipment

290.198  Preparation.
290.199  Disposition.
290.200  Transfers between factories and export warehouses.
290.201  Return to manufacturer or customs warehouse proprietor.
290.202  To officers of the armed forces for subsequent exportation.
290.203  To noncontiguous foreign countries and possessions of the 
          United States.
290.204  To a Federal department or agency.
290.205  To contiguous foreign countries.
290.206  To Government vessels and aircraft for consumption as supplies.
290.207  To commercial vessels and aircraft for consumption as supplies.
290.207a  To a foreign-trade zone.
290.208  For export by parcel post.

                        Miscellaneous Provisions

290.209  Diversion of shipment to another consignee.
290.210  Return of shipment to factory or export warehouse.
290.211  [Reserved]
290.212  Delay in lading at port of exportation.
290.213  Destruction of tobacco products, and cigarette papers and 
          tubes.

                       Subpart K--Drawback of Tax

290.221  Application of drawback of tax.
290.222  Claim.
290.223  Drawback bond.
290.224  Inspection by an ATF officer.
290.225  Delivery of tobacco products, or cigarette papers or tubes for 
          export other than by parcel post.
290.226  Delivery of tobacco products, and cigarette papers and tubes 
          for export by parcel post.
290.227  Customs procedure.
290.228  Landing certificate.
290.229  Collateral evidence as to landing.
290.230  Proof of loss.
290.231  Extension of time.
290.232  Allowance of claim.

         Subpart L--Withdrawal of Cigars From Customs Warehouses

290.241  Shipment restricted.
290.242  Responsibility for tax on cigars.

                                  Bonds

290.243  Bond required.
290.244  Amount of bond.
290.245  Strengthening bond.
290.246  Superseding bond.
290.247  Termination of liability of surety under bond.

                         Packaging Requirements

290.248  Packages.
290.249  Lottery features.
290.250  Indecent or immoral material.
290.251  Mark.
290.252  Label or notice.
290.253  Tax classification for cigars.
290.254  Shipping containers.

                         Consignment of Shipment

290.255  Consignment of cigars.

                      Notice of Removal of Shipment

290.256  Preparation.
290.257  Disposition.
290.258  To officers of the armed forces for subsequent exportation.
290.259  To noncontiguous foreign countries and possessions of the 
          United States.
290.260  To a Federal department or agency.
290.261  To contiguous foreign countries.
290.262  To Government vessels and aircraft for consumption as supplies.
290.263  To commercial vessels and aircraft for consumption as supplies.
290.264  To export warehouses.
290.264a  To a foreign-trade zone.
290.265  For export by parcel post.

                           Return of Shipment

290.266  Return of cigars from export warehouses.
290.267  Return of cigars from other sources.

    Authority: 26 U.S.C. 5142, 5143, 5146, 5701, 5703-5705, 5711-5713, 
5721-5723, 5731, 5741, 5751, 5754, 6061, 6065, 6151, 6402, 6404, 6806, 
7011, 7212, 7342, 7606, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.



                     Subpart A--Scope of Regulations



Sec. 290.1  Exportation of tobacco products, and cigarette papers and tubes, without payment of tax, or with drawback of tax.

    This part contains the regulations relating to the exportation 
(including supplies for vessels and aircraft) of tobacco products and 
cigarette papers and tubes, without payment of tax; the qualification 
of, and operations by, export warehouse proprietors; and the allowance 
of drawback of tax paid on tobacco products, and cigarette papers and 
tubes exported.

[T.D. 6871, 31 FR 48, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28087, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.2  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in

[[Page 234]]

each form shall be furnished as indicated by the headings on the form 
and the instructions on or pertaining to the form. In addition, 
information called for in each form shall be furnished as required by 
this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46922, Sept. 23, 1981, as amended by T.D. ATF-232, 
51 FR 28087, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-372, 61 FR 20725, May 8, 1996]



                         Subpart B--Definitions



Sec. 290.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, the 
following terms shall have the meanings given in this section, unless 
the context clearly indicates otherwise. Words in the plural form shall 
include the singular, and vice versa, and words indicating the masculine 
gender shall include the feminine. The terms ``includes'' and 
``including'' do not exclude things not listed which are in the same 
general class.
    Associate Director (Compliance Operations). The Associate Director 
(Compliance Operations) in the Bureau of Alcohol, Tobacco and Firearms, 
who is responsible to, and functions under the direction and supervision 
of, the Director.
    ATF officer. An officer of the Bureau of Alcohol, Tobacco and 
Firearms (ATF), authorized to perform any function relating to the 
administration or enforcement of this part.
    Cigar. Any roll of tobacco wrapped in leaf tobacco or in any 
substance containing tobacco (other than any roll of tobacco which is a 
cigarette within the definition of ``cigarette'' given in this section).
    Cigarette. (a) Any roll of tobacco wrapped in paper or in any 
substance not containing tobacco, and
    (b) Any roll of tobacco wrapped in any substance containing tobacco 
which, because of its appearance, the type of tobacco used in the 
filler, or its packaging and labeling, is likely to be offered to, or 
purchased by, consumers as a cigarette described in paragraph (a) of 
this definition.
    Chewing tobacco. Any leaf tobacco that is not intended to be smoked.
    Cigarette paper. Paper, or other material except tobacco, prepared 
for use as a cigarette wrapper.
    Cigarette papers. Taxable books or sets of cigarette papers.
    Cigarette tube. Cigarette paper made into a hollow cylinder for use 
in making cigarettes.
    Customs warehouse. A customs bonded manufacturing warehouse, class 
6, where cigars are manufactured of imported tobacco.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    District director of customs. The district director of customs at a 
headquarters port of the district (except the district of New York, 
N.Y.); the area directors of customs in the district of New York, N.Y.; 
and the port director at a port not designated as a headquarters port.
    Exportation or export. A severance of tobacco products or cigarette 
papers or tubes from the mass of things belonging to the United States 
with the intention of uniting them to the mass of things belonging to 
some foreign country. For the purposes of this part, shipment from the 
United States to Puerto Rico, the Virgin Islands, or a possession of the 
United States, shall be deemed exportation, as will the clearance from 
the United States of tobacco products and cigarette papers and tubes for 
consumption beyond the jurisdiction of the internal revenue laws of the 
United States, i.e., beyond the 3-mile limit or international boundary, 
as the case may be.
    Export warehouse. A bonded internal revenue warehouse for the 
storage of tobacco products and cigarette papers and tubes, upon which 
the internal revenue tax has not been paid, for subsequent shipment to a 
foreign country, Puerto Rico, the Virgin Islands, or a possession of the 
United States, or for consumption beyond the jurisdiction of the 
internal revenue laws of the United States.
    Export warehouse proprietor. Any person who operates an export 
warehouse.

[[Page 235]]

    Factory. The premises of a manufacturer of tobacco products or 
cigarette papers and tubes in which he carries on such business.
    Foreign-trade zone. A foreign-trade zone established and operated 
pursuant to the Act of June 18, 1934, as amended.
    In bond. The status of tobacco products and cigarette papers and 
tubes, which come within the coverage of a bond securing the payment of 
internal revenue taxes imposed by 26 U.S.C. 5701 or 7652, and in respect 
to which such taxes have not been determined as provided by regulations 
in this chapter, including (a) such articles in a factory or an export 
warehouse, (b) such articles removed, transferred, or released, pursuant 
to 26 U.S.C. 5704, and with respect to which relief from the tax 
liability has not occurred, and (c) such articles on which the tax has 
been determined, or with respect to which relief from the tax liability 
has occurred, which have been returned to the coverage of a bond.
    Manufacturer of cigarette papers and tubes. Any person who makes up 
cigarette paper into books or sets containing more than 25 papers each, 
or into tubes, except for his own personal use or consumption.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Package. The container in which tobacco products or cigarette papers 
or tubes are put up by the manufacturer and delivered to the consumer.
    Person. An individual, partnership, association, company, 
corporation, estate, or trust.
    Pipe tobacco. Any tobacco which, because of its appearance, type, 
packaging, or labeling, is suitable for use and likely to be offered to, 
or purchased by, consumers as tobacco to be smoked in a pipe.
    Region. A Bureau of Alcohol, Tobacco and Firearms Region.
    Regional Director (compliance). The principal regional official 
responsible for administering regulations in this part.
    Removal or remove. The removal of tobacco products or cigarette 
papers or tubes from either the factory or the export warehouse covered 
by the bond of the manufacturer or proprietor.
    Roll-your-own tobacco. Any tobacco which, because of its appearance, 
type, packaging, or labeling, is suitable for use and likely to be 
offered to, or purchased by, consumers as tobacco for making cigarettes.
    Sale price. The price for which large cigars are sold by the 
manufacturer, determined in accordance with Secs. 270.22 or 275.39.
    State. ``State'' shall, for the purposes of this part, be construed 
to include the District of Columbia.
    Smokeless tobacco. Any snuff or chewing tobacco.
    Snuff. Any finely cut, ground, or powdered tobacco that is not 
intended to be smoked.
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    United States. ``United States'' when used in a geographical sense 
shall include only the States and the District of Columbia.
    U.S.C. The United States Code.
    Zone operator. The person to whom the privilege of establishing, 
operating, and maintaining a foreign-trade zone has been granted by the 
Foreign-Trade Zones Board created by the Act of June 18, 1934, as 
amended.
    Zone restricted status. Tobacco products, cigarette papers and 
cigarette tubes which have been taken into a foreign trade zone from the 
United States Customs territory for the sole purpose of exportation or 
storage until exported.

[T.D. ATF-48, 43 FR 13556, Mar. 31, 1978; 44 FR 55856, Sept. 28, 1979, 
as amended by T.D. ATF-232, 51 FR 28087, Aug. 5, 1986; T.D. ATF-243, 51 
FR 43194, Dec. 1, 1986; T.D. ATF-289, 54 FR 48841, Nov. 27, 1989; T.D. 
ATF-421, 64 FR 71925, Dec. 22, 1999; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999; T.D. ATF-420, 64 FR 71945, Dec. 22, 1999]

[[Page 236]]



                Subpart Ba--Special (Occupational) Taxes

    Source: T.D. ATF-271, 53 FR 17563, May 17, 1988, unless otherwise 
noted.



Sec. 290.31  Liability for special tax.

    (a) Export warehouse proprietor. Every export warehouse proprietor 
shall pay a special (occupational) tax at a rate specified by 
Sec. 290.32. The tax shall be paid on or before the date of commencing 
the business of an export warehouseman, and thereafter every year on or 
before July 1. On commencing business, the tax shall be computed from 
the first day of the month in which liability is incurred, through the 
following June 30. Thereafter, the tax shall be computed for the entire 
year (July 1 through June 30).
    (b) Transition rule. For purposes of paragraph (a) of this section, 
a proprietor engaged in the business of an export warehouseman on 
January 1, 1988, shall be treated as having commenced business on that 
date. The special tax imposed by this transition rule shall cover the 
period January 1, 1988, through June 30, 1988, and shall be paid on or 
before April 1, 1988.
    (c) Each place of business taxable. An export warehouse proprietor 
under this part incurs special tax liability at each place of business 
in which an occupation subject to special tax is conducted. A place of 
business means the entire office, plant or area of the business in any 
one location under the same proprietorship. Passageways, streets, 
highways, rail crossings, waterways, or partitions dividing the premises 
are not sufficient separation to require additional special tax, if the 
divisions of the premises are otherwise contiguous.

(26 U.S.C. 5143, 5731)



Sec. 290.32  Rate of special tax.

    (a) General. Title 26 U.S.C. 5731(a)(3) imposes a special tax of 
$1,000 per year on every export warehouse proprietor.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5731(b) 
provides for a reduced rate of $500 per year with respect to any export 
warehouse proprietor whose gross receipts (for the most recent taxable 
year ending before the first day of the taxable period to which the 
special tax imposed by Sec. 290.31 relates) are less than $500,000. The 
``taxable year'' to be used for determining gross receipts is the 
taxpayer's income tax year. All gross receipts of the taxpayer shall be 
included, not just the gross receipts of the business subject to special 
tax. Proprietors of new businesses that have not yet begun a taxable 
year, as well as proprietors of existing businesses that have not yet 
ended a taxable year, who commence a new activity subject to special 
tax, qualify for the reduced special (occupational) tax rate, unless the 
business is a member of a ``controlled group''; in that case, the rules 
of paragraph (c) of this section shall apply.
    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' shall 
be replaced by the words ``more than 50 percent'' in each place they 
appear in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during such year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5731)

[[Page 237]]



Sec. 290.33  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on Form 5630.5 shall be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 290.34).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: that is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with a permit application, and if the information previously 
provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 290.142.
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by an officer. In each case, the person 
signing the return shall designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the title 
of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.

(26 U.S.C. 6061, 6065, 6151, 7011)



Sec. 290.34  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of

[[Page 238]]

the penalty specified in Sec. 70.113 of this chapter.
    (b) Application for employer identification number. Each taxpayer 
who files a special tax return, who has not already been assigned an 
employer identification number, shall file IRS Form SS-4 to apply for 
one. The taxpayer shall apply for and be assigned only one employer 
identification number, regardless of the number of places of business 
for which the taxpayer is required to file a special tax return. The 
employer identification number shall be applied for no later than 7 days 
after the filing of the taxpayer's first special tax return. IRS Form 
SS-4 may be obtained from the director of an IRS service center or from 
any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any supplementary 
statement, in accordance with the instructions on the form or issued in 
respect to it.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17563, May 17, 1988, as amended by T.D. ATF-301, 55 
FR 47658, Nov. 14, 1990]



Sec. 290.35  Issuance, distribution, and examination of special tax stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5 together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment to ATF Form 5630.5 required by Sec. 290.33(c)(2), but 
showing, as to name and address, only the name of the taxpayer and the 
address of the taxpayer's principal place of business (or principal 
office in the case of a corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
type on each stamp the address of the business conducted at the location 
for which that stamp is designated. The taxpayer shall then forward each 
stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by ATF officers, 
at the location for which designated, during business hours.

(26 U.S.C. 5146, 6806)



Sec. 290.36  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on ATF Form 5630.5, the export 
warehouse proprietor shall file an amended special tax return as soon as 
practicable after the change, covering the new corporate or firm name, 
or trade names. No new special tax is required to be paid. The export 
warehouse proprietor shall attach the special tax stamp for endorsement 
of the change in name.
    (b) Change in proprietorship--(1) General. If there is a change in 
the proprietorship of an export warehouse, the successor shall pay a new 
special tax and obtain the required special tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on ATF Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which he or she began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The widowed spouse or child, or executor, administrator 
or other legal representative of the taxpayer;

[[Page 239]]

    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.
    (d) Change in location. If there is a change in location of a 
taxable place of business, the export warehouse proprietor shall, within 
30 days after the change, file with ATF an amended special tax return 
covering the new location. The export warehouse proprietor shall attach 
the special tax stamp or stamps, for endorsement of the change in 
location. No new special tax is required to be paid. However, if the 
export warehouse proprietor does not file the amended return within 30 
days, he or she is required to pay a new special tax and obtain a new 
special tax stamp.

(26 U.S.C. 5143, 7011)



                           Subpart C--General



Sec. 290.61  Removals, withdrawals, and shipments authorized.

    (a) Tobacco products, and cigarette papers and tubes may be removed 
from a factory or an export warehouse, and cigars may be withdrawn from 
a customs warehouse, without payment of tax, for direct exportation or 
for delivery for subsequent exportation, in accordance with the 
provisions of this part.
    (b) Tobacco products and cigarette papers and tubes are not eligible 
for removal or transfer in bond under this part unless they bear the 
marks, labels or notices required by this part.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. ATF-421, 64 FR 71925, Dec. 22, 1999]



Sec. 290.61a  Deliveries to foreign-trade zones--export status.

    Tobacco products, and cigarette papers and tubes may be removed from 
a factory or an export warehouse and cigars may be withdrawn from a 
customs warehouse, without payment of tax, for delivery to a foreign-
trade zone for exportation or storage pending exportation in accordance 
with the provisions of this part. Such articles delivered to a foreign-
trade zone under this part shall be considered exported for the purpose 
of the statutes and bonds under which removed and for the purposes of 
the internal revenue laws generally and the regulations thereunder. 
However, export status is not acquired until an application for 
admission of the articles into the zone with zone restricted status has 
been approved by the district director of customs pursuant to the 
appropriate provisions of 19 CFR chapter I and the required certificate 
of receipt of the articles in the zone has been made on Form 5200.14 as 
prescribed in this part.

(48 Stat. 999, as amended, 72 Stat. 1418, as amended; 19 U.S.C. 81c; 26 
U.S.C. 5704)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28087, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 
1999]



Sec. 290.62  Restrictions on deliveries of tobacco products, and cigarette papers and tubes to vessels and aircraft, as supplies.

    Tobacco products, and cigarette papers and tubes may be removed from 
a factory or an export warehouse and cigars may be withdrawn from a 
customs warehouse, without payment of tax, for delivery to vessels and 
aircraft, as supplies, for consumption beyond the jurisdiction of the 
internal revenue laws of the United States, subject to the applicable 
provisions of this part. Deliveries may be made to vessels actually 
engaged in foreign, intercoastal, or noncontiguous territory trade 
(i.e., vessels operating on a regular schedule in trade or actually 
transporting passengers and/or cargo (a) between a port in the United 
States and a foreign port; (b) between the Atlantic and Pacific ports of 
the United States; or (c) between a port on the mainland of the United 
States and a port in Alaska, Hawaii, Puerto Rico, the Virgin Islands, or 
a possession of the United States; between a port in Alaska and a port 
in Hawaii; or between a port in Alaska or Hawaii and a port in Puerto 
Rico, the Virgin Islands, or a possession of the United States); to 
vessels clearing through customs for a port beyond the jurisdiction of 
the internal revenue laws of the United States; to vessels of

[[Page 240]]

war or other governmental activity; or to vessels of the United States 
documented to engage in the fishing business (including the whaling 
business), and foreign fishing (including whaling) vessels of 5 net tons 
or over. Such deliveries to vessels shall be subject to lading under 
customs supervision as provided in Secs. 290.207 and 290.263. As a 
condition to the lading of the tobacco products, and cigarette papers 
and tubes, the customs authorities at the port of lading may, if they 
deem it necessary in order to protect the revenue, require assurances, 
satisfactory to them, from the master of the receiving vessel that the 
quantities to be laden are reasonable, considering the number of persons 
to be carried, the vessel's itinerary, the duration of its intended 
voyage, etc., and that such articles are to be used exclusively as 
supplies on the voyage. For this purpose, the customs authorities may 
require the master of the receiving vessel to submit for customs 
approval, prior to lading, customs documentation for permission to lade 
the articles. Where the customs authorities allow only a portion of a 
shipment to be laden, the remainder of the shipment shall be returned to 
the bonded premises of the manufacturer, export warehouse proprietor, or 
customs warehouse proprietor making the shipment, or otherwise disposed 
of as approved by the regional director (compliance) for the region from 
which the articles were shipped. Deliveries may be made to aircraft 
clearing through customs en route to a place or places beyond the 
jurisdiction of the internal revenue laws of the United States, and to 
aircraft operating on a regular schedule between U.S. customs areas as 
defined in the Air Commerce Regulations (19 CFR part 122). Deliveries 
may not be made to a vessel or aircraft stationed in the United States 
for an indefinite period and where its schedule does not include 
operations outside such jurisdiction.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 48, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 
1999]



Sec. 290.63  Restrictions on disposal of tobacco products, and cigarette papers and tubes on vessels and aircraft.

    Tobacco products, and cigarette papers and tubes delivered to a 
vessel or aircraft, without payment of tax, pursuant to Sec. 290.62, 
shall not be sold, offered for sale, or otherwise disposed of until the 
vessel or aircraft is outside the jurisdiction of the internal revenue 
laws of the United States, i.e., outside the 3-mile limit or 
international boundary, as the case may be, of the United States. Where 
the vessel or aircraft returns within the jurisdiction of the internal 
revenue laws with such articles on board, the articles shall be subject 
to treatment under the tariff laws of the United States.

(72 Stat. 1418, as amended; 26 U.S.C. 5704; 19 U.S.C. 1317)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.64  Responsibility for delivery or exportation of tobacco products, and cigarette papers and tubes.

    Responsibility for compliance with the provisions of this part with 
respect to the removal under bond of tobacco products, and cigarette 
papers and tubes, without payment of tax, for export, and for the proper 
delivery or exportation of such articles, and with respect to the 
exportation of tobacco products, and cigarette papers and tubes with 
benefit of drawback of tax, shall rest upon the manufacturer of such 
articles or the proprietor of an export warehouse or customs warehouse 
from whose premises such articles are removed for export, and upon the 
exporter who exports tobacco products, and cigarette papers and tubes 
with benefit of drawback of tax.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

[[Page 241]]



Sec. 290.65  Liability for tax on tobacco products, and cigarette papers and tubes.

    The manufacturer of tobacco products and cigarette papers and tubes 
shall be liable for the taxes imposed thereon by 26 U.S.C. 5701: 
Provided, That when tobacco products, and cigarette papers and tubes are 
transferred, without payment of tax, pursuant to 26 U.S.C. 5704, between 
the bonded premises of manufacturers and/or export warehouse 
proprietors, the transferee shall become liable for the tax upon receipt 
by him of such articles. Any person who possesses tobacco products, or 
cigarette papers or tubes in violation of 26 U.S.C. 5751(a)(1) or (2), 
shall be liable for a tax equal to the tax on such articles.

(72 Stat. 1417, 1424; 26 U.S.C. 5703, 5751)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



Sec. 290.66  Relief from liability for tax.

    A manufacturer of tobacco products or cigarette papers and tubes or 
an export warehouse proprietor shall be relieved of the liability for 
tax on tobacco products, or cigarette papers or tubes when he furnishes 
the regional director (compliance), for the region in which the factory 
or warehouse is located, evidence satisfactory to the regional director 
(compliance) of exportation or proper delivery, as required by this 
part, or satisfactory evidence of such other disposition as may be used 
as the lawful basis for such relief. Such evidence shall be furnished 
within 90 days of the date of removal of the tobacco products, or 
cigarette papers or tubes: Provided, That this period may be extended 
for good cause shown.

(72 Stat. 1417; 26 U.S.C. 5703)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986]



Sec. 290.67  Payment of tax.

    (a) General. The taxes on tobacco products, and cigarette papers and 
tubes with respect to which the evidence described in Sec. 290.66 is not 
timely furnished shall become immediately due and payable. The taxes 
shall be paid to ATF, with sufficient information to identify the 
taxpayer, the nature and purpose of the payment, and the articles 
covered by the payment. (ATF Form 5000.24 may be used for this purpose.)
    (b) Large cigars. The amount of tax liability on large cigars shall 
be based on the maximum tax rate prescribed in Sec. 270.21 of this part, 
unless the person liable for the tax establishes that a lower tax rate 
is applicable.

(All recordkeeping requirements have been approved under OMB Control No. 
1512-0180)

[T.D. ATF-80, 46 FR 18311, Mar. 24, 1981, as amended by T.D. ATF-232, 51 
FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-251, 52 FR 19341, May 22, 1987; T.D. ATF-307, 55 FR 52745, Dec. 21, 
1990]



Sec. 290.68  [Reserved]



Sec. 290.69  Assessment.

    Whenever any person required by law to pay tax on tobacco products, 
and cigarette papers and tubes fails to pay such tax, the tax shall be 
ascertained and assessed against such person, subject to the limitations 
prescribed in 26 U.S.C. 6501. The tax so assessed shall be in addition 
to the penalties imposed by law for failure to pay such tax when 
required. Except in cases where delay may jeopardize collection of the 
tax, or where the amount is nominal or the result of an evident 
mathematical error, no such assessment shall be made until and after 
notice has been afforded such person to show cause against assessment. 
The person will be allowed 45 days from the date of such notice to show 
cause, in writing, against such assessment.

(72 Stat. 1417; 26 U.S.C. 5703)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



Sec. 290.70  Authority of ATF officers to enter premises.

    Any ATF officer may enter in the daytime any premises where tobacco 
products, or cigarette papers or tubes are produced or kept, so far as 
it may

[[Page 242]]

be necessary for the purpose of examining such articles. When such 
premises are open at night, any ATF officer may enter them, while so 
open, in the performance of his official duties. The owner of such 
premises, or person having the superintendence of the same, who refuses 
to admit any ATF officer or permit him to examine such articles shall be 
liable to the penalties prescribed by law for the offense.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.71  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this part, or endeavors to 
intimidate or impede any ATF officer acting in his official capacity, or 
forcibly rescues or attempts to rescue or causes to be rescued any 
property, after it has been duly seized for forfeiture to the United 
States in connection with a violation of the internal revenue laws, 
shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)

[25 FR 4716, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975]

                      Variations From Requirements



Sec. 290.72  Alternate methods or procedures.

    A manufacturer of tobacco products, an export warehouse proprietor, 
or a customs warehouse proprietor, on specific approval by the Director 
as provided in this section, may use an alternate method or procedure in 
lieu of a method or procedure specifically prescribed in this part. The 
Director may approve an alternate method or procedure, subject to stated 
conditions, when he finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure.
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue, and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part. No 
alternate method or procedure relating to the giving of any bond or to 
the assessment, payment, or collection of tax, shall be authorized under 
this section. Where a manufacturer or proprietor desires to employ an 
alternate method or procedure, he shall submit a written application to 
do so, in triplicate, to the regional director (compliance) for 
transmittal to the Director. The application shall specifically describe 
the proposed alternate method or procedure, and shall set forth the 
reasons therefor. Alternate methods or procedures shall not be employed 
until the application has been approved by the Director. The 
manufacturer or proprietor shall, during the period of authorization of 
an alternate method or procedure, comply with the terms of the approved 
application. Authorization for any alternate method or procedure may be 
withdrawn whenever in the judgment of the Director the revenue is 
jeopardized or the effective administration of this part is hindered. 
The manufacturer or proprietor shall retain, as part of his records, any 
authorization of the Director under this section.

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 290.73  Emergency variations from requirements.

    The Director may approve methods of operation other than as 
specified in this part, where he finds that an emergency exists and the 
proposed variations from the specified requirements are necessary, and 
the proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications,
    (b) Will not hinder the effective administration of this part, and
    (c) Will not be contrary to any provision of law. Variations from 
requirements granted under this section are conditioned on compliance 
with the

[[Page 243]]

procedures, conditions, and limitations set forth in the approval of the 
application. Failure to comply in good faith with such procedures, 
conditions, and limitations shall automatically terminate the authority 
for such variations and the manufacturer, export warehouse proprietor, 
or customs warehouse proprietor, thereupon shall fully comply with the 
prescribed requirements of regulations from which the variations were 
authorized. Authority for any variations may be withdrawn whenever in 
the judgment of the Director the revenue is jeopardized or the effective 
administration of this part is hindered by the continuation of such 
variation. Where a manufacturer or proprietor desires to employ such 
variation, he shall submit a written application to do so, in 
triplicate, to the regional director (compliance) for transmittal to the 
Director. The application shall describe the proposed variations and set 
forth the reasons therefor. Variations shall not be employed until the 
application has been approved. The manufacturer or proprietor shall 
retain, as part of his records, any authorization of the Director under 
this section.

[T.D. 6871, 31 FR 50, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



 Subpart D--Qualification Requirements for Export Warehouse Proprietors

    Source: 25 FR 4716, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 290.81  Persons required to qualify.

    Every person who intends to engage in business as an export 
warehouse proprietor, as defined in this part, shall qualify as such in 
accordance with the provisions of this part.

(72 Stat. 1421; 26 U.S.C. 5711, 5712, 5713)



Sec. 290.82  Application for permit.

    Every person, before commencing business as an export warehouse 
proprietor, shall make application, on Form 2093, to the regional 
director (compliance) for, and obtain, the permit provided for in 
Sec. 290.93. All documents required under this part to be furnished with 
such application shall be made a part thereof.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 290.83  Corporate documents.

    Every corporation, before commencing business as an export warehouse 
proprietor, shall furnish with its application for permit required by 
Sec. 290.82, a true copy of the corporate charter or a certificate of 
corporate existence or incorporation, executed by the appropriate 
officer of the State in which incorporated. The corporation shall also 
furnish, in duplicate, evidence which will establish the authority of 
the officer or other person who executes the application for permit to 
execute the same; the authority of persons to sign other documents, 
required by this part, for the corporation; and the identity of the 
officers and directors, and each person who holds more than ten percent 
of the stock of such corporation. Where a corporation has previously 
filed such documents or evidence with the same regional director 
(compliance), a written statement by the corporation, in duplicate, to 
that effect will be sufficient for the purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 290.84  Articles of partnership or association.

    Every partnership or association, before commencing business as an 
export warehouse proprietor, shall furnish with its application for 
permit, required by Sec. 290.82 a true copy of the articles of 
partnership or association, if any, or certificate of partnership or 
association where required to be filed by any State, county, or 
municipality. Where a partnership or association has previously filed 
such documents with the same regional director (compliance), a written 
statement by the partnership or association, in duplicate, to that 
effect will be sufficient for the purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 290.85  Trade name certificate.

    Every person, before commencing business under a trade name as an 
export warehouse proprietor, shall furnish with his application for 
permit,

[[Page 244]]

required by Sec. 290.82, a true copy of the certificate or other 
document, if any, issued by a State, county, or municipal authority in 
connection with the transaction of business under such trade name. If no 
such certificate or other document is so required a written statement, 
in duplicate, to that effect by such person will be sufficient for the 
purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 290.86  Bond.

    Every person, before commencing business as an export warehouse 
proprietor, shall file, in connection with his application for permit, a 
bond, Form 2103, in accordance with the applicable provisions of 
Sec. 290.88 and subpart F, conditioned upon compliance with the 
provisions of chapter 52, I.R.C., and regulations thereunder, including, 
but not limited to, the timely payment of taxes imposed by such chapter 
and penalties and interest in connection therewith for which he may 
become liable to the United States.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 290.87  Power of attorney.

    If the application for permit or other qualifying documents are 
signed by an attorney in fact for an individual, partnership, 
association, company, or corporation, or by one of the partners for a 
partnership, or by an officer of an association or company, or, in the 
case of a corporation, by an officer or other person not authorized to 
sign by the corporate documents described in Sec. 290.83, power of 
attorney conferring authority upon the person signing the documents 
shall be manifested on Form 1534 and furnished to the regional director 
(compliance).



Sec. 290.88  Description and diagram of premises.

    The premises to be used by an export warehouse proprietor as his 
warehouse shall be described, in the application for permit required by 
Sec. 290.82, and bond required by Sec. 290.86, by number, street, and 
city, town, or village, and State. Such premises may consist of more 
than one building, which need not be contiguous: Provided, That such 
premises are located in the same city, town, or village and each located 
is described in the application for permit and the bond by number and 
street. Where such premises consist of less than an entire building, a 
diagram, in duplicate, shall also be furnished showing the particular 
floor or floors, or room or rooms, comprising the warehouse.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 290.89  Separation of premises.

    Where the export warehouse premises consist of less than an entire 
building, the premises shall be completely separated from adjoining 
portions of the building, which separation shall be constructed of 
materials generally used in the construction of buildings and may 
include any necessary doors or other openings.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 290.90  Restrictions relating to export warehouse premises.

    Export warehouse premises shall be used exclusively for the storage 
of tobacco products and cigarette papers and tubes, upon which the 
internal revenue tax has not been paid, for subsequent removal under 
this part: Provided, That smoking tobacco may also be stored in an 
export warehouse.

[T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986]



Sec. 290.91  Additional information.

    The regional director (compliance) may require such additional 
information as may be deemed necessary to determine whether the 
applicant is entitled to a permit. The applicant shall, when required by 
the regional director (compliance), furnish as a part of his application 
for permit such additional information as may be necessary for the 
regional director (compliance) to determine whether the applicant is 
entitled to a permit.



Sec. 290.92  Investigation of applicant.

    The regional director (compliance) shall promptly cause such inquiry 
or investigation to be made, as he deems necessary, to verify the 
information furnished in connection with an application for permit and 
to ascertain

[[Page 245]]

whether the applicant is, by reason of his business experience, 
financial standing, and trade connections, likely to maintain operations 
in compliance with 26 U.S.C. chapter 52, and regulations thereunder; 
whether such person has disclosed all material information required or 
made any material false statement in the application for such permit; 
and whether the premises on which it is proposed to establish the export 
warehouse are adequate to protect the revenue. If the regional director 
(compliance) has reason to believe that the applicant is not entitled to 
a permit, he shall promptly give the applicant notice of the 
contemplated disapproval of his application and opportunity for hearing 
thereon in accordance with part 200 of this chapter, which part 
(including the provisions relating to the recommended decision and to 
appeals) is made applicable to such proceedings. If, after such notice 
and opportunity for hearing, the regional director (compliance) finds 
that the applicant is not entitled to a permit, he shall, by order 
stating the findings on which his decision is based, deny the permit.

(72 Stat. 1421; 26 U.S.C. 5712)

[25 FR 4716, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979]



Sec. 290.93  Issuance of permit.

    If the application for permit, bond, and supporting documents, 
required under this part, are approved by him, the regional director 
(compliance) shall issue a permit, Form 2096, to the export warehouse 
proprietor. The permit shall bear a number and shall fully set forth 
where the business of the export warehouse proprietor is to be 
conducted. The proprietor shall retain such permit at all times within 
his export warehouse and it shall be readily available for inspection by 
any ATF officer upon his request. Where the warehouse consists of more 
than one building, the permit shall be retained in the building in which 
the records, required by Sec. 290.142, are kept.

(72 Stat. 1421; 26 U.S.C. 5713)



   Subpart E--Changes Subsequent to Original Qualification of Export 
                          Warehouse Proprietors

    Source: 25 FR 4717, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.

                             Changes in Name



Sec. 290.101  Change in individual name.

    Where there is a change in the name of an individual operating as an 
export warehouse proprietor he shall, within 30 days of such change, 
make application on Form 2098 for an amended permit.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 290.102  Change in trade name.

    Where there is a change in, or an addition or discontinuance of, a 
trade name used by an export warehouse proprietor in connection with 
operations authorized by his permit, the proprietor shall, within 30 
days of such change, addition, or discontinuance, make application on 
Form 2098 for an amended permit to reflect such change. The proprietor 
shall also furnish a true copy of any new trade name certificate or 
document issued to him, or statement in lieu thereof, required by 
Sec. 290.85.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 290.103  Change in corporate name.

    Where there is a change in the name of a corporate export warehouse 
proprietor the proprietor shall, within 30 days of such change, make 
application on Form 2098 for an amended permit. The proprietor shall 
also furnish such documents as may be necessary to establish that the 
corporate name has been changed.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]

[[Page 246]]

                    Changes in Ownership and Control



Sec. 290.104  Fiduciary successor.

    If an administrator, executor, receiver, trustee, assignee, or other 
fiduciary, is to take over the business of an export warehouse 
proprietor, as a continuing operation, such fiduciary shall, before 
commencing operations, make application for permit and file bond as 
required by subpart D of this part, furnish certified copies, in 
duplicate, of the order of the court, or other pertinent documents, 
showing his appointment and qualification as such fiduciary, and make an 
opening inventory, in accordance with the provisions of Sec. 290.144; 
Provided, That where a diagram has been furnished by the predecessor, in 
accordance with the provisions of Sec. 290.88, the successor may adopt 
such diagram. However, where a fiduciary intends merely to liquidate the 
business, qualification as an export warehouse proprietor will not be 
required if he promptly files with the regional director (compliance) a 
statement to that effect, together with an extension of coverage of the 
predecessor's bond, executed by the fiduciary, also by the surety on 
such bond, in accordance with the provisions of Sec. 290.126.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5721)



Sec. 290.105  Transfer of ownership.

    If a transfer is to be made in ownership of the business of an 
export warehouse proprietor (including a change in the identity of the 
members of a partnership or association), such proprietor shall give 
notice, in writing, to the regional director (compliance), naming the 
proposed successor and the desired effective date of such transfer. The 
proposed successor shall, before commencing operations, qualify as a 
proprietor, in accordance with the applicable provisions of subpart D of 
this part: Provided, That where a diagram has been furnished by the 
proprietor in accordance with the provisions of Sec. 290.88, the 
proposed successor may adopt such diagram. The proprietor shall give 
such notice of transfer, and the proposed successor shall make 
application for permit and file bond, as required, in ample time for 
examination and approval thereof before the desired date of such change. 
The predecessor shall make a closing inventory and closing report, in 
accordance with the provisions of Secs. 290.146 and 290.151, 
respectively, and surrender, with such inventory and report, his permit, 
and the successor shall make an opening inventory, in accordance with 
the provisions of Sec. 290.144.

(72 Stat. 1421, 1422; 26 U.S.C. 5712, 5713, 5721, 5722)



Sec. 290.106  Change in officers or directors of a corporation.

    Where there is any change in the officers or directors of a 
corporation operating the business of an export warehouse proprietor, 
the proprietor shall furnish to the regional director (compliance) 
notice, in writing, of the election of the new officers or directors 
within 30 days after such election.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 290.107  Change in stockholders of a corporation.

    Where the issuance, sale, or transfer of the stock of a corporation, 
operating as an export warehouse proprietor, results in a change in the 
identity of the principal stockholders exercising actual or legal 
control of the operations of the corporation, the corporate proprietor 
shall, within 30 days after the change occurs, make application for a 
new permit; otherwise, the present permit shall be automatically 
terminated at the expiration of such 30-day period, and the proprietor 
shall dispose of all cigars, cigarettes, and cigarette papers and tubes 
on hand, in accordance with this part, make a closing inventory and 
closing report, in accordance with the provisions of Secs. 290.146 and 
290.151, respectively, and surrender his permit with such inventory and 
report. If the application for a new permit is timely made, the present 
permit shall continue in effect pending final action with respect to 
such application.

(72 Stat. 1421, 1422; 26 U.S.C. 5712, 5713, 5721, 5722)

[T.D. 6871, 31 FR 50, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]

[[Page 247]]

                    Changes in Location and Premises



Sec. 290.108  Change in location within same region.

    Whenever an export warehouse proprietor contemplates changing the 
location of his warehouse within the same region, the proprietor shall, 
before commencing operations at the new location, make an application, 
to the regional director (compliance), on Form 2098 for an amended 
permit. The application shall be supported by an extension of coverage 
of the bond filed under this part, in accordance with the provisions of 
Sec. 290.126.

(72 Stat. 1421; 26 U.S.C. 5711, 5712)



Sec. 290.109  Change in address.

    Whenever any change occurs in the address, but not the location, of 
the warehouse of an export warehouse proprietor, as a result of action 
of local authorities, the proprietor shall, within 30 days of such 
change, make application on Form 2098 for an amended permit.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 290.110  Change in location to another region.

    Whenever an export warehouse proprietor contemplates changing the 
location of his warehouse to another region, he shall, before commencing 
operations at the new location, qualify as such a proprietor in the new 
region, in accordance with the applicable provisions of subpart D. The 
proprietor shall notify the regional director (compliance) of the region 
from which he is removing of his qualification in the new region, giving 
the address of the new location of his warehouse and the number of the 
permit issued to him in the new region, make a closing inventory and 
closing report, in accordance with the provisions of Secs. 290.146 and 
290.151, respectively, and surrender, with such inventory and report, 
the permit for his old location.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5713, 5721, 5722)



Sec. 290.111  Change in export warehouse premises.

    Where an export warehouse is to be changed to an extent which will 
make inaccurate the description of the warehouse as set forth in the 
last application by the proprietor for permit, or the diagram, if any, 
furnished with such application, the proprietor shall first make 
application on Form 2098 for, and obtain, an amended permit. Such 
application shall describe the proposed change in the warehouse and 
shall be accompanied by a new diagram if required under Sec. 290.88.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 290.112  Emergency premises.

    In cases of emergency, the regional director (compliance) may 
authorize, for a stated period, the temporary use of a place for the 
temporary storage of tobacco products, and cigarette papers and tubes, 
without making the application or furnishing the extension of coverage 
of bond required under Secs. 290.111 and 290.126, or the temporary 
separation of warehouse premises by means other than those specified in 
Sec. 290.89, where such action will not hinder the effective 
administration of this part, is not contrary to law, and will not 
jeopardize the revenue.

[T.D. 6871, 31 FR 50, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



          Subpart F--Bonds and Extensions of Coverage of Bonds

    Source: 25 FR 4718, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 290.121  Corporate surety.

    (a) Surety bonds required under the provisions of this part may be 
given only with corporate sureties holding certificates of authority 
from the Secretary of the Treasury as acceptable sureties on Federal 
bonds. Limitations concerning corporate sureties are prescribed by the 
Secretary in Treasury Department Circular No. 570, as revised

[[Page 248]]

(see paragraph (c) of this section). The surety shall have no interest 
whatever in the business covered by the bond.
    (b) Each bond and each extension of coverage of bond shall at the 
time of filing be accompanied by a power of attorney authorizing the 
agent or officer who executed the bond to so act on behalf of the 
surety. The regional director (compliance) who is authorized to approve 
the bond may, whenever he deems it necessary, require additional 
evidence of the authority of the agent or officer to execute the bond or 
extension of coverage of bond. The power of attorney shall be prepared 
on a form provided by the surety company and executed under the 
corporate seal of the company. If the power of attorney submitted is 
other than a manually signed document, it shall be accompanied by a 
certificate of its validity.
    (c) Treasury Department Circular No. 570 (Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies) is published in the Federal Register 
annually as of the first workday in July. As they occur, interim 
revisions of the circular are published in the Federal Register. Copies 
may be obtained from the Audit Staff, Bureau of Government Financial 
Operations, Department of the Treasury, Washington, DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7); sec. 
202, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5711))

[T.D. ATF-92, 46 FR 46923, Sept. 23, 1981]



Sec. 290.122  Deposits of bonds, notes, or obligations in lieu of corporate surety.

    Bonds or notes of the United States, or other obligations which are 
unconditionally guaranteed as to both interest and principal by the 
United States, may be pledged and deposited by the export warehouse 
proprietor as security in connection with bond to cover his operations, 
in lieu of the corporate surety, in accordance with the provisions of 
Treasury Department Circular No. 154, revised (31 CFR part 225). Such 
bonds or notes which are nontransferable, or the pledging of which will 
not be recognized by the Treasury Department, are not acceptable as 
security in lieu of corporate surety.

(72 Stat. 1421, 61 Stat. 650; 26 U.S.C. 5711, 6 U.S.C. 15)



Sec. 290.123  Amount of bond.

    The amount of the bond filed by the export warehouse proprietor, as 
required by Sec. 290.86, shall be not less than the estimated amount of 
tax which may at any time constitute a charge against the bond: 
Provided, That the amount of any such bond (or the total amount where 
original and strengthening bonds are filed) shall not exceed $200,000 
nor be less than $1,000. The charge against such bond shall be subject 
to increase upon receipt of tobacco products, and cigarette papers and 
tubes into the export warehouse and to decrease as satisfactory evidence 
of exportation, or satisfactory evidence of such other disposition as 
may be used as the lawful basis for crediting such bond, is received by 
the regional director (compliance) with respect to such articles 
transferred or removed. When the limit of liability under a bond given 
in less than the maximum amount has been reached, no additional 
shipments shall be received into the warehouse until a strengthening or 
superseding bond is filed, as required by Sec. 290.124 or Sec. 290.125.

(72 Stat. 1421, as amended; 26 U.S.C. 5711)

[T.D. 6871, 31 FR 50, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.124  Strengthening bond.

    Where the regional director (compliance) determines that the amount 
of the bond, under which an export warehouse proprietor is currently 
carrying on business, no longer adequately protects the revenue, and 
such bond is in an amount of less than $200,000, the regional director 
(compliance) administrator may require the proprietor to file a 
strengthening bond in an appropriate amount with the same surety as that 
on the bond already in effect, in lieu of a superseding bond to cover 
the full liability on the basis of Sec. 290.123. The regional director 
(compliance)

[[Page 249]]

shall refuse to approve any strengthening bond where any notation is 
made thereon which is intended or which may be construed as a release of 
any former bond, or as limiting the amount of either bond to less than 
its full amount.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 290.125  Superseding bond.

    An export warehouse proprietor shall file a new bond to supersede 
his current bond, immediately when (a) the corporate surety on the 
current bond becomes insolvent, (b) the regional director (compliance) 
approves a request from the surety on the current bond to terminate his 
liability under the bond, (c) payment of any liability under a bond is 
made by the surety thereon, or (d) the regional director (compliance) 
considers such a superseding bond necessary for the protection of the 
revenue.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 290.126  Extension of coverage of bond.

    An extension of the coverage of any bond filed under this part shall 
be manifested on Form 2105 by the export warehouse proprietor and by the 
surety on the bond with the same formality and proof of authority as 
required for the execution of the bond.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 290.127  Approval of bond and extension of coverage of bond.

    No person shall commence operations under any bond, nor extend his 
operations, until he receives from the regional director (compliance) 
notice of his approval of the bond or of an appropriate extension of 
coverage of the bond required under this part.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 290.128  Termination of liability of surety under bond.

    The liability of a surety on any bond required by this part shall be 
terminated only as to operations on and after the effective date of a 
superseding bond, or the date of approval of the discontinuance of 
operations by the export warehouse proprietor, or otherwise in 
accordance with the termination provisions of the bond. The surety shall 
remain bound in respect of any liability for unpaid taxes, penalties, 
and interest, not in excess of the amount of the bond, incurred by the 
proprietor while the bond is in force.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 290.129  Release of bonds, notes, and obligations.

    (a) Bonds, notes, and other obligations of the United States, 
pledged and deposited as security in connection with bonds required by 
this part, shall be released only in accordance with the provisions of 
Treasury Department Circular No. 154 (31 CFR Part 225--Acceptance of 
Bonds, Notes or Other Obligations Issued or Guaranteed by the United 
States as Security in Lieu of Surety or Sureties on Penal Bonds). When 
the regional director (compliance) is satisfied that it is no longer 
necessary to hold such security, he shall fix the date or dates on which 
a part or all of such security may be released. At any time prior to the 
release of such security, the regional director (compliance) may, for 
proper cause, extend the date of release of such security for such 
additional length of time as in his judgment may be appropriate.
    (b) Treasury Department Circular No. 154 is periodically revised and 
contains the provisions of 31 CFR part 225 and the forms prescribed in 
31 CFR part 225. Copies of the circular may be obtained from the Audit 
Staff, Bureau of Government Financial Operations, Department of the 
Treasury, Washington, DC 20226.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1421 (26 U.S.C. 5711); July 30, 
1947, ch. 390, 61 Stat. 650 (6 U.S.C. 15))

[T.D. ATF-92, 46 FR 46923, Sept. 23, 1981; 46 FR 48644, Oct. 2, 1981]



          Subpart G--Operations by Export Warehouse Proprietors

    Source: 25 FR 4719, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 290.141  Sign.

    Every export warehouse proprietor shall place and keep, on the 
outside of

[[Page 250]]

the building in which his warehouse is located, or at the entrance of 
his warehouse, where it can be plainly seen, a sign, in plain and 
legible letters, exhibiting the name under which he operates and (a) the 
type of business (``Export Warehouse Proprietor'') or (b) the number of 
the permit issued to the export warehouse proprietor under this part.



Sec. 290.142  Records.

    Every export warehouse proprietor must keep in such warehouse 
complete and concise records, containing the:
    (a) Number of containers;
    (b) Unit type (e. g., cartons, cases);
    (c) Kind of articles (e. g., small cigarettes);
    (d) Name of manufacturer and brand; and,
    (e) Quantity of tobacco products, cigarette papers and tubes 
received, removed, transferred, destroyed, lost or returned to 
manufacturers or to customs warehouse proprietors. In addition to such 
records, the export warehouse proprietor shall retain a copy of each 
Form 5200.14 received from a manufacturer, another export warehouse 
proprietor, or customs warehouse proprietor, from whom tobacco products 
and cigarette papers and tubes are received and a copy of each Form 
5200.14 covering the tobacco products, and cigarette papers and tubes 
removed from the warehouse. The entries for each day in the records 
maintained or kept under this section shall be made by the close of the 
business day following that on which the transactions occur. No 
particular form of records is prescribed, but the information required 
shall be readily ascertainable. The records and copies of Form 5200.14 
shall be retained for 3 years following the close of the calendar year 
in which the shipments were received or removed and shall be made 
available for inspection by any ATF officer upon request.


(Approved by the Office of Management and Budget under control number 
1512-0367)

(72 Stat. 1423, as amended; 26 U.S.C. 5741)

[T.D. ATF-421, 64 FR 71925, Dec. 22, 1999]

                               Inventories



Sec. 290.143  General.

    (a) Every export warehouse proprietor shall at the times specified 
in this subpart make a true and accurate inventory of products held on 
ATF Form 5220.3 (3373). This inventory must be submitted to the Regional 
Director (Compliance), and must specify the following:
    (1) The number of small cigars, large cigars, small cigarettes, 
large cigarettes, cigarette papers, and cigarette tubes held by such 
proprietor at the times specified in this subpart.
    (2) The pounds and ounces of chewing tobacco, snuff, pipe tobacco 
and roll-your-own tobacco held by such proprietor at the times specified 
in this subpart.
    (b) This inventory shall be subject to verification by an ATF 
officer. A copy of each inventory shall be retained by the export 
warehouse proprietor for 3 years following the close of the calendar 
year in which the inventory is made and shall be made available for 
inspection by any ATF officer upon request.

[T.D. ATF-289, 54 FR 48841, Nov. 27, 1989, as amended by T.D. ATF-421, 
64 FR 71925, Dec. 22, 1999; T.D. ATF-424, 64 FR 71933, Dec. 22, 1999]



Sec. 290.144  Opening.

    An opening inventory shall be made by the export warehouse 
proprietor at the time of commencing business. The date of commencing 
business under this part shall be the effective date indicated on the 
permit issued under Sec. 290.93. A similar inventory shall be made by 
the export warehouse proprietor when he files a superseding bond. The 
date of such inventory shall be the effective date of such superseding 
bond as indicated thereon by the regional director (compliance).

(72 Stat. 1422; 26 U.S.C. 5721)



Sec. 290.145  Special.

    A special inventory shall be made by the export warehouse proprietor 
whenever required by any ATF officer.

(72 Stat. 1422; 26 U.S.C. 5721)

[[Page 251]]



Sec. 290.146  Closing.

    A closing inventory shall be made by the export warehouse proprietor 
when he transfers ownership, changes his location to another region, or 
concludes business. Where the proprietor transfers ownership the closing 
inventory shall be made as of the day preceding the date of the opening 
inventory of the successor.

(72 Stat. 1422; 26 U.S.C. 5721)

                                 Reports



Sec. 290.147  General.

    Every export warehouse proprietor shall make a report on Form 
5220.4, to the regional director (compliance), of all tobacco products, 
and cigarette papers and tubes on hand, received, removed, transferred, 
and lost or destroyed. Such report shall be made at the times specified 
in this subpart and shall be made whether or not any operations or 
transactions occurred during the period covered by the report. A copy of 
each report shall be retained by the export warehouse proprietor at his 
warehouse for 3 years following the close of the calendar year covered 
in such reports, and made available for inspection by any ATF officer 
upon his request.

(72 Stat. 1422; 26 U.S.C. 5722)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 1999; T.D. ATF-
424, 64 FR 71933, Dec. 22, 1999]



Sec. 290.148  Opening.

    An opening report, covering the period from the date of the opening 
inventory, or inventory made in connection with a superseding bond, to 
the end of the month, shall be made on or before the 20th day following 
the end of the month in which the business was commenced.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 290.149  Monthly.

    A report for each full month shall be made on or before the 20th day 
following the end of the month covered in the report.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 290.150  Special.

    A special report, covering the unreported period to the day 
preceding the date of any special inventory required by an ATF officer, 
shall be made with such inventory. Another report, covering the period 
from the date of such inventory to the end of the month, shall be made 
on or before the 20th day following the end of the month in which the 
inventory was made.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 290.151  Closing.

    A closing report, covering the period from the first of the month to 
the date of the closing inventory, or the day preceding the date of an 
inventory made in connection with a superseding bond, shall be made with 
such inventory.

(72 Stat. 1422; 26 U.S.C. 5722)

                                 Claims



Sec. 290.152  Claim for remission of tax liability.

    Remission of the tax liability on tobacco products, and cigarette 
papers and tubes may be extended to the export warehouse proprietor 
liable for the tax where such articles in bond are lost (otherwise than 
by theft) or destroyed, by fire, casualty, or act of God, while in the 
possession or ownership of such proprietor. Where articles are so lost 
or destroyed the proprietor shall report promptly such fact, and the 
circumstances, to the regional director (compliance) for the region in 
which the warehouse is located. If the proprietor wishes to be relieved 
of the tax liability thereon he shall also prepare a claim on Form 
5620.8, in duplicate, setting forth the nature, date, place, and extent 
of the loss or destruction. Both copies of the claim, accompanied by 
such evidence as is necessary to establish to the satisfaction of the 
regional director (compliance) that the claim is valid, shall be filed 
with the regional director (compliance) for the region in which the 
warehouse is located. Upon action on the claim by the

[[Page 252]]

regional director (compliance) he will return the copy of Form 5620.8 to 
the proprietor as notice of such action, which copy shall be retained by 
the proprietor for 3 years following the close of the calendar year in 
which the claim is filed.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6961, 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 
1999]



Sec. 290.153  Claim for abatement of assessment.

    A claim for abatement of the unpaid portion of the assessment of any 
tax on tobacco products, and cigarette papers and tubes, or any 
liability in respect of such tax, alleged to be excessive in amount, 
assessed after the expiration of the period of limitation applicable 
thereto, or erroneously or illegally assessed, shall be filed on Form 
5620.8 with the regional director (compliance). Such claim shall set 
forth the reasons relied upon for the allowance of the claim and shall 
be supported by such evidence as is necessary to establish to the 
satisfaction of the regional director (compliance) that the claim is 
valid.

(68A Stat. 792; 26 U.S.C. 6404)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19341, May 22, 
1987; T.D. ATF-421, 64 FR 71925, Dec. 22, 1999]



Sec. 290.154  Claim for refund of tax.

    The taxes paid on tobacco products, and cigarette papers and tubes 
may be refunded (without interest) to an export warehouse proprietor on 
proof satisfactory to the regional director (compliance) that the 
claimant proprietor paid the tax on such articles which were after 
taxpayment lost (otherwise than by theft) or destroyed, by fire, 
casualty, or act of God, while in the possession or ownership of such 
export warehouse proprietor, or withdrawn by him from the market. Any 
claim for refund under this section shall be prepared on Form 5620.8, in 
duplicate, and shall include a statement that the tax imposed by 26 
U.S.C. 7652 or chapter 52, was paid in respect to the articles covered 
by the claim, and that the articles were lost, destroyed, or withdrawn 
from the market within 6 months preceding the date the claim is filed. 
The claim shall be filed with the regional director (compliance) for the 
region in which the tax was paid and shall be supported by such evidence 
as is necessary to establish to the satisfaction of the regional 
director (compliance) that the claim is valid. The duplicate of the 
claim shall be retained by the export warehouse proprietor for 3 years 
following the close of the calendar year in which the claim is filed. 
Where an export warehouse proprietor has paid the tax on tobacco 
products, or cigarette papers or tubes, he may file claim for refund of 
an overpayment of tax under subpart A of part 296 of this chapter if, at 
the time the tax was paid, these articles had been exported, destroyed, 
or otherwise disposed of in such a manner that tax was not due and 
payable.

(68A Stat. 791, 72 Stat. 9, 1419, as amended; 26 U.S.C. 6402, 6423, 
5705)

[T.D. 6961, 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-251, 52 FR 19341, May 22, 1987; T.D. ATF-421, 64 FR 
71925, Dec. 22, 1999]



         Subpart H--Suspension and Discontinuance of Operations



Sec. 290.161  Discontinuance of operations.

    Every export warehouse proprietor who desires to discontinue 
operations and close out his warehouse shall dispose of all cigars, 
cigarettes, and cigarette papers and tubes on hand, in accordance with 
this part, making a closing inventory and closing report, in accordance 
with the provisions of Secs. 290.146 and 290.151, respectively, and 
surrender, with such inventory and report, his permit to the regional 
director (compliance) as notice of such discontinuance, in order that 
the regional director (compliance) may terminate

[[Page 253]]

the liability of the surety on the bond of the export warehouse 
proprietor.

(72 Stat. 1422; 26 U.S.C. 5721, 5722)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 290.162  Suspension and revocation of permit.

    Where the regional director (compliance) has reason to believe that 
an export warehouse proprietor has not in good faith complied with the 
provisions of 26 U.S.C. chapter 52, and regulations thereunder, or with 
any other provision of 26 U.S.C. with intent to defraud, or has violated 
any condition of his permit, or has failed to disclose any material 
information required or made any material false statement in the 
application for permit, or has failed to maintain his premises, in such 
manner as to protect the revenue, the regional director (compliance) 
shall issue an order, stating the facts charged, citing such export 
warehouse proprietor to show cause why his permit should not be 
suspended or revoked after hearing thereon in accordance with part 200 
of this chapter, which part (including the provisions relating to 
appeals) is made applicable to such proceedings. If the hearing 
examiner, or the Director, on appeal, decides the permit should be 
suspended, for such time as to him seems proper, or be revoked, the 
regional director (compliance) shall by order give effect to such 
decision.

(72 Stat. 1421; 26 U.S.C. 5713)

[25 FR 4720, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979]

Subpart I [Reserved]



Subpart J--Removal of Shipments of Tobacco Products and Cigarette Papers 
       and Tubes by Manufacturers and Export Warehouse Proprietors

                         Packaging Requirements



Sec. 290.181  Packages.

    All tobacco products, and cigarette papers and tubes will, before 
removal or transfer under this subpart, be put up by the manufacturer in 
packages which shall bear the label or notice, tax classification, and 
mark, as required by this subpart. For purposes of this subpart, the 
package does not include the cellophane wrapping material.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-421, 64 FR 71925, Dec. 22, 1999]



Sec. 290.182  Lottery features.

    No certificate, coupon, or other device purporting to be or to 
represent a ticket, chance, share, or an interest in, or dependent on, 
the event of a lottery shall be contained in, attached to, or stamped, 
marked, written, or printed on any package of tobacco products, or 
cigarette papers or tubes.

(72 Stat. 1422; 26 U.S.C. 5723, 18 U.S.C. 1301)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.183  Indecent or immoral material.

    No indecent or immoral picture, print, or representation shall be 
contained in, attached to, or stamped, marked, written, or printed on 
any package of tobacco products, or cigarette papers or tubes.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.184  Mark.

    Every package of tobacco products shall, before removal from the 
factory under this subpart, have adequately imprinted thereon, or on a 
label securely affixed thereto, a mark as specified in this section. The 
mark may consist of the name of the manufacturer removing the product 
and the location (by city and State) of the factory from which the 
products are to be so removed, or may consist of the permit number of 
the factory from which the products are to be so removed. Any trade name 
of the manufacturer approved as provided in Sec. 270.65 of this chapter 
may be used in the mark as the

[[Page 254]]

name of the manufacturer.) As an alternative, where tobacco products are 
both packaged and removed by the same manufacturer, either at the same 
or different factories, the mark may consist of the name of such 
manufacturer if the factory where package is identified on or in the 
package by a means approved by the Director. Before using the 
alternative, the manufacturer shall notify the Director in writing of 
the name to be used as the name of the manufacturer and the means to be 
used for identifying the factory where packaged. If approved by him the 
Director shall return approved copies of the notice to the manufacturer. 
A copy of the approved notice shall be retained as part of the factory 
records at each of the factories operated by the manufacturer.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.185  Label or notice.

    Every package of tobacco products shall, before removal from the 
factory under this subpart, have adequately imprinted thereon, or on a 
label securely affixed thereto, the words ``Tax-exempt. For use outside 
U.S.'' or the words ``U.S. Tax-exempt. For use outside U.S.'' except 
where a stamp, sticker, or notice, required by a foreign country or a 
possession of the United States, which identifies such country or 
possession, is so imprinted or affixed.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.186  Tax classification for cigars.

    Before removal from a factory under this subpart, every package of 
cigars shall have adequately imprinted on it, or on a label securely 
affixed to it--
    (a) The designation ``cigars'';
    (b) The quantity of cigars contained in the package; and
    (c) For small cigars, the classification of the product for tax 
purposes; (i.e., either ``small'' or ``little'').

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-80, 46 FR 18312, Mar. 24, 1981]



Sec. 290.187  Shipping containers.

    Each shipping case, crate, or other container in which tobacco 
products, or cigarette papers or tubes are to be shipped or removed, 
under this part, shall bear a distinguishing number, such number to be 
assigned by the manufacturer or export warehouse proprietor. Removals of 
tobacco products, and cigarette papers and tubes from an export 
warehouse shall be made, insofar as practicable, in the same containers 
in which they were received from the factory.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                         Consignment of Shipment



Sec. 290.188  General.

    Tobacco products, and cigarette papers and tubes transferred or 
removed from a factory or an export warehouse, under this part, without 
payment of tax, shall be consigned as required by this subpart.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.189  Transfers between factories and export warehouses.

    Where tobacco products, and cigarette papers and tubes are 
transferred, without payment of tax, from a factory to an export 
warehouse or between export warehouses, such articles shall be

[[Page 255]]

consigned to the export warehouse proprietor to whom such articles are 
to be delivered.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.190  Return of shipment to a manufacturer or customs warehouse proprietor.

    Where tobacco products, and cigarette papers and tubes are returned 
by an export warehouse proprietor to a manufacturer or where cigars are 
so returned to a customs warehouse proprietor, such articles shall be 
consigned to the manufacturer or customs warehouse proprietor to whom 
the shipment is to be returned.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.191  To officers of the armed forces for subsequent exportation.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to officers of the 
armed forces of the United States in this country for subsequent 
shipment to, and use by, the armed forces outside the United States, the 
manufacturer or export warehouse proprietor shall consign such articles 
to the receiving officer at the armed forces base or installation, in 
this country, to which they are to be delivered.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.192  To vessels and aircraft for shipment to noncontiguous foreign countries and possessions of the United States.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse, for direct delivery to a vessel 
or aircraft for transportation to a noncontiguous foreign country, 
Puerto Rico, the Virgin Islands, or a possession of the United States, 
the manufacturer or export warehouse proprietor shall consign the 
shipment directly to the vessel or aircraft, or to his agent at the port 
for delivery to the vessel or aircraft.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.193  To a Federal department or agency.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse and are destined for ultimate 
delivery in a noncontiguous foreign country, Puerto Rico, the Virgin 
Islands, or a possession of the United States, but the shipment is to be 
delivered in the United States to a Federal department or agency, or to 
an authorized dispatch agent, transportation officer, or port director 
of such a department or agency for forwarding on to the place of 
destination of the shipment, the manufacturer or export warehouse 
proprietor shall consign the shipment to the Federal department or 
agency, or to the proper dispatch agent, transportation officer, or port 
director of such department or agency.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.194  To district director of customs for shipment to contiguous foreign countries.

    Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for export to a contiguous foreign 
country, the manufacturer or export warehouse proprietor shall consign 
the shipment to

[[Page 256]]

the district director of customs at the border or other port of exit.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6961, 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.195  To Government vessels and aircraft for consumption as supplies.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to a vessel or 
aircraft engaged in an activity for the Government of the United States 
or a foreign government, for consumption as supplies beyond the 
jurisdiction of the internal revenue laws of the United States, the 
manufacturer or export warehouse proprietor shall consign the shipment 
to the proper officer on board the vessel or aircraft to which the 
shipment is to be delivered.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.196  To district director of customs for consumption as supplies on commercial vessels and aircraft.

    Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for consumption as supplies beyond 
the jurisdiction of the internal revenue laws of the United States, the 
manufacturer or export warehouse proprietor shall consign the shipment 
to the district director of customs at the port at which the shipment is 
to be laden.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.196a  To a foreign-trade zone.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to a foreign-trade 
zone, under zone restricted status for the purpose of exportation or 
storage, the manufacturer or export warehouse proprietor shall consign 
the shipment to the Zone Operator in care of the customs officer in 
charge of the zone.

(48 Stat. 999, as amended, 72 Stat. 1418, as amended; 19 U.S.C. 81c, 26 
U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.197  For export by parcel post.

    Tobacco products, and cigarette papers and tubes removed from a 
factory or an export warehouse, for export by parcel post to a person in 
a foreign country, Puerto Rico, the Virgin Islands, or a possession of 
the United States, shall be addressed and consigned to such person when 
the articles are deposited in the mails. Waiver of his right to withdraw 
such articles from the mails shall be stamped or written on each 
shipping container and be signed by the manufacturer or export warehouse 
proprietor making the shipment.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                      Notice of Removal of Shipment



Sec. 290.198  Preparation.

    For each shipment of tobacco products, and cigarette papers and 
tubes transferred or removed from his factory, under bond and this part, 
the manufacturer shall prepare a notice of removal, Form 5200.14, and 
for each shipment of tobacco products, and cigarette papers and tubes 
transferred or removed from his export warehouse, under bond and this 
part, the export warehouse proprietor shall prepare a notice of removal, 
Form 5200.14. Each such notice shall be given a serial number by the 
manufacturer or export warehouse proprietor in a series beginning with 
number 1, with respect to the first shipment removed from the factory or 
export warehouse under this

[[Page 257]]

part and commencing again with number 1 on January 1 of each year 
thereafter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 
1999]



Sec. 290.199  Disposition.

    After actual removal from his factory or export warehouse of the 
shipment described on the notice of removal, Form 5200.14, the 
manufacturer or export warehouse proprietor shall, except where the 
shipment is to be exported by parcel post, promptly forward one copy of 
the notice of removal to the regional director (compliance) for the 
region in which is located the factory or warehouse from which the 
shipment is removed. A copy of each such notice shall be retained by the 
manufacturer or export warehouse proprietor as a part of his records, 
for 3 years following the close of the calendar year in which the 
shipment was removed and shall be made available for inspection by any 
ATF officer upon his request. The manufacturer or export warehouse 
proprietor shall dispose of the other copies of each notice of removal 
as required by this subpart.

(72 Stat. 1418; 26 U.S.C. 5704)

[25 FR 4722, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975; 
T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.200  Transfers between factories and export warehouses.

    Where tobacco products, and cigarette papers and tubes are 
transferred from a factory to an export warehouse or between export 
warehouses, the manufacturer or export warehouse proprietor making the 
shipment shall forward three copies of the notice of removal, Form 
5200.14 to the export warehouse proprietor to whom the shipment is 
consigned. Immediately upon receipt of the shipment at his warehouse, 
the export warehouse proprietor shall properly execute the certificate 
of receipt on each copy of the notice of removal, noting thereon any 
discrepancy; return one copy to the manufacturer or export warehouse 
proprietor making the shipment for filing with his regional director 
(compliance); retain one copy at his warehouse as a part of his records; 
and file the remaining copy with his report, required by Sec. 290.147.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 290.201  Return to manufacturer or customs warehouse proprietor.

    Where tobacco products, and cigarette papers and tubes are removed 
from an export warehouse for return to the factory, or cigars are 
removed from such a warehouse for return to a customs warehouse, the 
export warehouse proprietor making the shipment shall forward two copies 
of the notice of removal, Form 5200.14, to the manufacturer or customs 
warehouse proprietor to whom the shipment is consigned. Immediately upon 
receipt of the shipment at his factory or warehouse, the manufacturer or 
customs warehouse proprietor shall properly execute the certificate of 
receipt on both copies of the notice of removal, noting thereon any 
discrepancy, and return one copy to the export warehouse proprietor 
making the shipment for filing with his regional director (compliance). 
The other copy of the notice of removal shall be retained by the 
manufacturer or customs warehouse proprietor, as a part of his records, 
for 3 years following the close of the calendar year in which the 
shipment was received and shall be made available for inspection by any 
ATF officer upon his request.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 290.202  To officers of the armed forces for subsequent exportation.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to officers of the 
armed forces of the United States in this country for subsequent 
shipment to, and use by, the armed forces outside

[[Page 258]]

the United States, the manufacturer or export warehouse proprietor 
making the removal shall forward a copy of the notice of removal, Form 
5200.14, to the officer at the base or installation authorized to 
receive the articles described on the notice of removal. Upon execution 
by the armed forces receiving officer of the certificate of receipt on 
the copy of the notice of removal, he shall return such copy to the 
manufacturer or export warehouse proprietor making the shipment for 
filing with his regional director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 290.203  To noncontiguous foreign countries and possessions of the United States.

    Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for direct delivery to a vessel or 
aircraft for transportation to a noncontiguous foreign country, Puerto 
Rico, the Virgin Islands, or a possession of the United States, the 
manufacturer or export warehouse proprietor making the shipment shall 
file two copies of the notice of removal, Form 5200.14, with the office 
of the district director of customs at the port where the shipment is to 
be laden. Such copies of the notice of removal should be filed with the 
related shipper's export declaration, Commerce Form 7525-V. In the event 
the copies of the notice of removal are not filed with the shipper's 
export declaration, when the copies of the notice are filed with the 
district director of customs they shall show all particulars necessary 
to enable that officer to associate the notice with the related 
shipper's export declaration and any other documents filed with his 
office in connection with the shipment. After the vessel or aircraft on 
which the shipment has been laden clears or departs from the port of 
lading the customs authority shall execute the certificate of 
exportation on both copies of the notice of removal, retain one copy for 
his records, and deliver or transmit the other copy to the manufacturer 
or export warehouse proprietor making the shipment for filing with his 
regional director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 290.204  To a Federal department or agency.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse and are destined for ultimate 
delivery in a noncontiguous foreign country, Puerto Rico, the Virgin 
Islands, or a possession of the United States, but the shipment is to be 
delivered to a Federal department or agency, or to an authorized 
dispatch agent, transportation officer, or port director of such a 
department or agency for forwarding on to the place of destination of 
the shipment, the manufacturer or export warehouse proprietor making the 
shipment shall furnish a copy of the notice of removal, Form 5200.14, to 
the Federal department or agency, or an officer thereof at the port, 
receiving the shipment for ultimate transmittal to the place of 
destination, in order that such department, agency, or officer can 
properly execute the certificate of receipt on such notice to evidence 
receipt of the shipment for transmittal to a place beyond the 
jurisdiction of the internal revenue laws of the United States. After 
completing such certificate, the Federal department, agency, or officer 
shall return the copy of the notice of removal, so executed, to the 
manufacturer or export warehouse proprietor making the shipment for 
filing with his regional director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]

[[Page 259]]



Sec. 290.205  To contiguous foreign countries.

    (a) Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for export to a contiguous foreign 
country, the manufacturer or export warehouse proprietor making the 
shipment shall--
    (1) Furnish to the district director of Customs at the port of exit 
two copies of the notice of removal, Form 5200.14, together with the 
related shipper's export declaration, Commerce Form 7525-V (if 
required); and,
    (2) If copies of the notice of removal are not filed with the 
shippers export declaration, or if a shipment is for the armed forces of 
the United States in the contiguous foreign country and a shipper's 
export declaration is not required, show all the information on the 
notice of removal when it is filed so that the Customs officer is able 
to associate the notice with the related shipper's export declaration 
(if any) or other documents filed with Customs for the shipment.
    (b) When a shipment has been cleared by Customs from the United 
States, and when the Customs officer at the port of exit is satisfied 
that the products have departed from the United States, he shall--
    (1) Complete the certificate of exportation on both copies of the 
notice of removal;
    (2) Retain one copy of the notice of removal for his records; and,
    (3) Return the other copy to the manufacturer or export warehouse 
proprietor making the shipment for filing with his regional director 
(compliance).
    (c) The Customs officer may, when he considers it necessary to 
establish that the merchandise was actually exported, require a landing 
certificate before he completes the certificate of exportation specified 
in paragraph (b)(1) of this section. If practical, the Customs officer 
will give advance notice to the manufacturer or export warehouse 
proprietor of the type of transactions for which a landing certificate 
will be required. However, failure to notify the manufacturer or 
proprietor in advance will not prevent the Customs officer from 
requiring a landing certificate for specific exportations when he 
considers it necessary to protect the revenue. In any case, the Customs 
officer will advise the manufacturer or proprietor before departure of 
the shipment from the United States as to those exports for which a 
landing certificate will be required.
    (d) The provisions of this section relating to landing certificates 
also apply when a Form 5200.14 is not required for each transaction (for 
example: When multiple exportations, individually documented by 
commercial records, are consolidated on a single Form 5200.14 pursuant 
to an approved alternate procedure under Sec. 290.72). The provisions 
apply to each transaction, regardless of the manner in which it is 
documented, unless specifically provided otherwise in the alternate 
procedure.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1418; (26 U.S.C. 5704); Sec. 622, 
Act of June 17, 1930, 49 Stat. 759 (19 U.S.C. 1622))

[T.D. ATF-52, 43 FR 59287, Dec. 19, 1978, as amended by T.D. ATF-232, 51 
FR 28089, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.206  To Government vessels and aircraft for consumption as supplies.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for direct delivery to a vessel or 
aircraft, engaged in an activity for the Government of the United States 
or a foreign government, for consumption as supplies beyond the 
jurisdiction of the internal revenue laws of the United States, the 
manufacturer or export warehouse proprietor making the shipment shall 
forward a copy of the notice of removal, Form 5200.14, to the officer of 
the vessel or aircraft authorized to receive the shipment. Upon 
execution by the receiving officer of the vessel or aircraft of the 
certificate of receipt on the copy of the notice of removal, he shall 
return such copy to the manufacturer or export warehouse proprietor

[[Page 260]]

making the shipment for filing with his regional director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 54, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 290.207  To commercial vessels and aircraft for consumption as supplies.

    Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for delivery to a vessel or 
aircraft entitled to receive such articles for consumption as supplies 
beyond the jurisdiction of the internal revenue laws of the United 
States, the manufacturer or export warehouse proprietor making the 
shipment shall file two copies of the notice of removal, Form 5200.14, 
with the district director of customs at the port where the shipment is 
to be laden in sufficient time to permit delivery of the two copies of 
the notice of removal to the customs officer who will inspect the 
shipment and supervise its lading. After inspection and lading of the 
shipment the customs officer shall note on the copies of the notice of 
removal any discrepancy between the shipment inspected and laden under 
his supervision and that described on the notice of removal or any 
limitation on the quantity to be laden; complete and sign the 
certificate of inspection and lading; and return both copies of the 
notice of removal to the district director of customs. The district 
director of customs shall execute the certificate of clearance on both 
copies of the notice of removal, retain one copy for his records, and 
forward the other copy to the manufacturer or export warehouse 
proprietor making the shipment for filing with his regional director 
(compliance). Where the vessel or aircraft does not clear from the port 
at which the shipment is laden, the customs officer supervising the 
lading of the shipment shall require the person on board the vessel or 
aircraft authorized to receive the shipment to execute the certificate 
of receipt on both copies of the notice of removal to indicate the trade 
or activity in which the vessel or aircraft is engaged.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 290.207a  To a foreign-trade zone.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to a foreign-trade 
zone, under zone restricted status for the purpose of exportation or 
storage, the manufacturer or export warehouse proprietor making the 
shipment shall forward two copies of the notice of removal, Form 
5200.14, to the customs officer in charge of the zone. Upon receipt of 
the shipment, the customs officer shall execute the certificate of 
receipt on each copy of the form, noting thereon any discrepancy, retain 
one copy for his records, and forward the other copy to the manufacturer 
or export warehouse proprietor making the shipment for filing with his 
regional director (compliance).

(48 Stat. 999, as amended, 72 Stat. 1418, as amended; 19 U.S.C. 81c, 26 
U.S.C. 5704)

[T.D. 6871, 31 FR 54, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 290.208  For export by parcel post.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse, for export by parcel post, the 
manufacturer or export warehouse proprietor shall present one copy of 
the notice of removal, Form 5200.14, together with the shipping 
containers, to the postal authorities with the request that the 
postmaster or his agent execute the certificate of mailing on the form. 
Where the manufacturer or export warehouse proprietor so desires, he may 
cover under one notice of removal all the merchandise removed under this 
part for export by parcel post which is delivered at one time to the 
postal service for that purpose. The manufacturer or export warehouse 
proprietor

[[Page 261]]

shall immediately file the receipted copy of the notice of removal with 
his regional director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 54, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]

                        Miscellaneous Provisions



Sec. 290.209  Diversion of shipment to another consignee.

    If, after removal of a shipment from a factory or an export 
warehouse, the manufacturer or export warehouse proprietor desires to 
divert the shipment to another consignee, he shall so notify his 
regional director (compliance). The manufacturer or export warehouse 
proprietor shall describe the shipment, set forth the serial number and 
date of the notice of removal under which the shipment was removed from 
his factory or export warehouse, and furnish the name and address of the 
new consignee, who shall comply with all applicable provisions of this 
part.

(72 Stat. 1418; 26 U.S.C. 5704)

[25 FR 4723, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 290.210  Return of shipment to factory or export warehouse.

    A manufacturer or export warehouse proprietor may return to his 
factory or export warehouse, without internal revenue supervision when 
so authorized by the regional director (compliance), tobacco products, 
and cigarette papers and tubes previously removed therefrom, under this 
part, but not yet exported. The manufacturer or export warehouse 
proprietor shall, prior to returning the articles to his factory or 
export warehouse, make application to the regional director (compliance) 
for permission so to do, which application shall be accompanied by two 
copies of the notice of removal, Form 5200.14, under which the articles 
were originally removed. If less than the entire shipment is intended to 
be returned to the factory or export warehouse, the application shall 
set forth accurately the articles to be returned and shall show what 
disposition was made of the remainder of the original shipment and any 
other facts pertinent to such shipment. Where the regional director 
(compliance) approves the application, he shall so indicate by 
endorsement to that effect on each of the copies of the notice of 
removal, set forth the articles for which return is approved, and return 
both copies of the notice of removal to the manufacturer or export 
warehouse proprietor concerned. Upon receipt of the copies of the notice 
of removal bearing the endorsement of the regional director 
(compliance), the manufacturer or export warehouse proprietor shall 
return the articles to his factory or export warehouse, properly modify 
and execute the certificate of receipt on each copy of the notice of 
removal, return one such copy to the regional director (compliance), and 
retain the other copy as a part of his records.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 54, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 290.211  [Reserved]



Sec. 290.212  Delay in lading at port of exportation.

    If, on arrival of tobacco products, and cigarette papers and tubes 
at the port of exportation, the vessel or aircraft for which they are 
intended is not prepared to receive the articles, they may be properly 
stored at the port for not more than 30 days. In the event of any 
further delay, the facts shall be reported by the manufacturer or export 
warehouse proprietor to his regional director (compliance) and unless he 
approves an extension of time in which to effect lading and clearance of 
the shipment it must be returned to the factory or export warehouse.

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1987; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

[[Page 262]]



Sec. 290.213  Destruction of tobacco products, and cigarette papers and tubes.

    Where an export warehouse proprietor desires to destroy any of the 
tobacco products, or cigarette papers or tubes stored in his warehouse, 
he shall notify the regional director (compliance) of the kind and 
quantity of such articles to be destroyed and the date on which he 
desires the destruction to take place in order that the regional 
director (compliance) may assign an ATF officer to inspect the articles 
and supervise their destruction. The export warehouse proprietor shall 
prepare a notice of removal, Form 5200.14, describing the articles to be 
destroyed. After witnessing the destruction of the articles, the ATF 
officer shall certify to their destruction on two copies of the notice 
of removal and return them to the export warehouse proprietor, who shall 
retain one copy for his records and file the other copy with his 
regional director (compliance).

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



                       Subpart K--Drawback of Tax



Sec. 290.221  Application of drawback of tax.

    Allowance of drawback of tax shall apply only to tobacco products, 
and cigarette papers and tubes, on which tax has been paid, when such 
articles are shipped to a foreign country, Puerto Rico, the Virgin 
Islands, or a possession of the United States. Such drawback shall be 
allowed only to the person who paid the tax on such articles and who 
files claim and otherwise complies with the provisions of this subpart.

(72 Stat. 1419, 68A Stat. 908; 26 U.S.C. 5706, 7653)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.222  Claim.

    Claim for allowance of drawback of tax, under this subpart, shall be 
filed on Form 5620.7 with the regional director (compliance) for the 
region in which the tobacco products, and cigarette papers and tubes 
covered by the claim are held by the claimant. Such claim shall be so 
filed in sufficient time to permit the regional director (compliance) to 
detail an ATF officer to inspect the articles and supervise destruction 
of the stamps thereon denoting payment of tax or, where the tax has been 
paid by return, to supervise the affixture of a label or notice bearing 
the legend ``For Export With Drawback of Tax.'' Upon receipt of a claim 
supported by satisfactory bond, as required by this subpart, the 
regional director (compliance) shall assign an ATF officer to proceed to 
the place where the articles involved are held and there perform the 
functions required in Sec. 290.224.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]



Sec. 290.223  Drawback bond.

    Each claim for allowance of drawback of tax, under this subpart, 
shall be accompanied by a bond, Form 2148, satisfactory to the regional 
director (compliance) with whom the claim is filed. Such bond shall be 
in an amount not less than the amount of tax for which drawback is 
claimed, conditioned that the claimant shall furnish, within a 
reasonable time, evidence satisfactory to the regional director 
(compliance) that the tobacco products, and cigarette papers and tubes 
have been landed at some port beyond the jurisdiction of the internal 
revenue laws of the United States, or that after clearance from the 
United States, the articles were lost (otherwise than by theft) or 
destroyed, by fire, casualty, or act of God, and have not been relanded 
within the limits of the United States. The provisions of Secs. 290.121 
and 290.122 are applicable with respect to any

[[Page 263]]

drawback bond required under this section.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.224  Inspection by an ATF officer.

    The ATF officer assigned in connection with a claim for drawback of 
tax, under this subpart, shall, at the place where the tobacco products, 
and cigarette papers and tubes covered by the claim are held by the 
claimant, examine such articles and satisfy himself as to the accuracy 
of the schedule of such articles appearing in the claim, Form 5620.7. 
Where the tax has been paid by stamp, the ATF officer will supervise 
destruction of the stamps on the packages. No particular mode of 
destruction of such stamps is prescribed, but the use of any indelible 
preparation which will render them illegible is approved. Where the tax 
on such articles has been paid by return, the ATF officer will satisfy 
himself that the articles have in fact been taxpaid and each package 
bears the label or notice required by Sec. 290.222. When the stamps have 
been properly destroyed, or the packages bear the required label or 
notice, the ATF officer will supervise the packing of such articles in 
shipping containers, the numbering of each such container, and the 
affixture thereto of the following:

    Drawback of tax claimed on contents.
    Sale, consumption, or use in U.S. prohibited.


Thereafter, the ATF officer will execute his report on each copy of the 
claim, return two copies to the claimant, deliver one copy to the 
regional director (compliance), and release the shipment to the claimant 
for delivery to the port of exportation.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]



Sec. 290.225  Delivery of tobacco products, or cigarette papers or tubes for export other than by parcel post.

    The claimant, upon release of the tobacco products, or cigarette 
papers or tubes by the ATF officer for exportation with benefit of 
drawback of tax under this subpart, shall be responsible for delivery of 
such articles to the port of exportation for customs inspection, 
supervision of lading, and clearance of the articles. The claimant shall 
file with the district director of customs at the port of exportation 
the two copies of Form 5620.7 returned to the claimant by the ATF 
officer in accordance with Sec. 290.224. Such copies shall be filed in 
sufficient time prior to lading to permit customs inspection and 
supervision of lading of the tobacco products, or cigarette papers or 
tubes.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]



Sec. 290.226  Delivery of tobacco products, and cigarette papers and tubes for export by parcel post.

    Where the tobacco products, and cigarette papers and tubes are to be 
shipped by parcel post to a destination in a foreign country, Puerto 
Rico, the Virgin Islands, or a possession of the United States, a waiver 
of his right to withdraw such articles from the mails shall be stamped 
or written on each shipping container and be signed by the claimant, 
after which the claimant shall present the shipment to the post office. 
The claimant shall request the postmaster or his agent to execute the 
certificate of mailing on the copy of the claim, Form 5620.7, returned 
to the claimant by the ATF officer in accordance with Sec. 290.224. When 
so executed by the postal authorities, the Form 5620.7 shall be 
transmitted at once to the regional director (compliance) with whom the 
form was previously filed.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]

[[Page 264]]



Sec. 290.227  Customs procedure.

    The customs officer shall satisfy himself that the tobacco products, 
and cigarette papers and tubes described on the Form 5620.7 and those 
inspected by him are the same and shall note on the form any 
discrepancy. After having inspected the articles and supervised the 
lading thereof on the export carrier, the customs officer shall complete 
and sign the certificate of inspection and lading on both copies of Form 
5620.7 and deliver or transmit such copies to the office of his district 
director of customs for further processing. After clearance from the 
port of the export carrier on which the articles are laden, the district 
director of customs shall execute the certificate of exportation on both 
copies of Form 5620.7. The district director of customs shall retain one 
copy of the form for his records and transmit the other copy to the 
regional director (compliance) for the region from which the articles 
were shipped.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]



Sec. 290.228  Landing certificate.

    Each claimant for drawback under this subpart agrees in the bond 
filed by him that he will furnish, within a reasonable time, evidence 
satisfactory to the regional director (compliance) that the tobacco 
products, and cigarette papers and tubes covered by his claim have been 
landed at some port beyond the jurisdiction of the internal revenue laws 
of the United States, or that after shipment from the United States the 
articles were lost, and have not been relanded within the limits of the 
United States. The landing certificate shall accurately describe the 
articles involved, so as to readily identify the drawback claim to which 
it relates. The landing certificate shall be signed by a revenue officer 
at the place of destination, unless it is shown that no such officer can 
furnish such landing certificate, in which case the certificate of 
landing shall be signed by the consignee, or by the vessel's agent at 
the place of landing, and shall be sworn to before a notary public or 
other officer authorized to administer oaths and having an official 
seal. The landing certificate shall be filed with the regional director 
(compliance), with whom the drawback claim was filed, within 6 months 
from the date of clearance of the tobacco products, and cigarette papers 
and tubes from the United States. A landing certificate prepared in a 
foreign language shall be accompanied by an accurate translation thereof 
in English.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 56, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.229  Collateral evidence as to landing.

    In case of inability to furnish the prescribed evidence of landing, 
application for relief shall be promptly made by the claimant to the 
regional director (compliance) with whom the drawback claim and bond 
were filed. Such application shall set forth the facts connected with 
the alleged exportation, and indicate the date of shipment, the kind, 
quantity, and value of tobacco products and cigarette papers and tubes 
shipped, the name of the consignee, the name of the vessel, the port or 
place of destination to which the shipment was made, and the date and 
amount of the bond covering such shipment. The application shall also 
state in what particular the provisions of this subpart, respecting the 
proofs of landing, have not been complied with, and the cause of failure 
to furnish such proofs; that such failure was not occasioned by any lack 
of diligence on the part of the claimant, or that of his agents; and 
that he is unable to furnish any other or better evidence than that 
furnished with his application. Each such application shall be supported 
by the best collateral evidence the claimant may be able to submit. The 
evidence may consist of the original or verified copies of letters from 
the consignee advising the claimant of the arrival or sale of the 
tobacco products, and cigarette papers and tubes, with such other 
statements respecting the

[[Page 265]]

failure to furnish the prescribed evidence of landing as may be obtained 
from the consignee or other persons having knowledge thereof. Such 
letters and other documents in a foreign language shall be accompanied 
by accurate translations thereof in English, and, when the letters fail 
to identify sufficiently the tobacco products, and cigarette papers and 
tubes, the original sales account must be produced.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 56, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.230  Proof of loss.

    When the claimant is unable to procure a certificate of landing, in 
accordance with the provisions of Sec. 290.228, in consequence of loss 
of the tobacco products, and cigarette papers and tubes, his application 
for relief shall set forth the extent of the loss and, if possible, the 
location and manner of shipwreck or other casualty and the time of its 
occurrence. When obtainable, affidavits of the vessel's owners should be 
furnished detailing the manner and extent of the loss and the time and 
location of the disaster. If the tobacco products, and cigarette papers 
and tubes were insured, the claimant shall furnish certificates by 
officers of the insurance companies that the insurance has been paid, 
and that, to the best of their knowledge and belief, the tobacco 
products, and cigarette papers and tubes were actually destroyed. The 
aforesaid proof shall be furnished to the regional director (compliance) 
within 6 months from the date of clearance of the tobacco products, and 
cigarette papers and tubes from the United States.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 56, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 290.231  Extension of time.

    In case the claimant, from causes beyond his control, is unable to 
furnish the landing certificate or proof of loss, within the time 
prescribed therefor, he may make an application to the regional director 
(compliance) for an extension of time in which to do so. Such 
application must state specifically the cause of failure to furnish the 
evidence. Two extensions of three months each may be granted by the 
regional director (compliance), provided the surety on the drawback bond 
of the claimant assents in writing thereto.

(72 Stat. 1419; 26 U.S.C. 5706)

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 290.232  Allowance of claim.

    On receipt of the executed Form 5620.7 from the district director of 
customs, the regional director (compliance) will allow or disallow the 
claim in accordance with existing law and regulations. If the claim is 
not allowed in full the regional director (compliance) will notify the 
claimant, in writing, of the reasons for any disallowance.

(72 Stat. 1419; 26 U.S.C. 5706)

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-424, 64 FR 71933, Dec. 22, 1999]



         Subpart L--Withdrawal of Cigars From Customs Warehouses

    Source: 25 FR 4725, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 290.241  Shipment restricted.

    Cigars produced in a customs warehouse in accordance with customs 
laws and regulations may be withdrawn under this subpart, without 
payment of tax, for export or for delivery for subsequent exportation. 
Duties paid on the tobacco used in the manufacture of such cigars may 
not be recovered on the exportation of the cigars under this subpart.



Sec. 290.242  Responsibility for tax on cigars.

    A customs warehouse proprietor who withdraws cigars for export under 
his bond, without payment of tax, in accordance with the provisions of 
this part, shall be responsible for payment

[[Page 266]]

of such tax until he is relieved of such responsibility by furnishing 
the regional director (compliance), for the region in which is located 
the customs warehouse from which the cigars were withdrawn, evidence 
satisfactory to the regional director (compliance) of exportation or 
proper delivery, as required by this subpart, or satisfactory evidence 
of such other disposition as may be used as the lawful basis for such 
relief. Such evidence shall be furnished within 90 days of the date of 
withdrawal of the cigars: Provided, That this period may be extended for 
good cause shown.

                                  Bonds



Sec. 290.243  Bond required.

    Where the customs warehouse proprietor desires to withdraw cigars 
from his warehouse, without payment of tax, under this subpart, he 
shall, prior to making the first withdrawal, file with the regional 
director (compliance) a bond, Form 2104, conditioned upon compliance 
with the provisions of 26 U.S.C. chapter 52, and regulations thereunder, 
including, but not limited to, the timely payment of taxes imposed by 
such chapter, for which he may be responsible to the United States, and 
penalties and interest in connection therewith. The provisions of 
Secs. 290.121 and 290.122 are applicable to the bond required under this 
section. However, such bond shall not be required where the customs 
warehouse proprietor has in effect a bond, Form 2100, pursuant to 
Sec. 270.199 of this subchapter, conditioned upon compliance with 26 
U.S.C. chapter 52, and regulations thereunder.

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979]



Sec. 290.244  Amount of bond.

    The amount of the bond filed by the customs warehouse proprietor, as 
required by Sec. 290.243, shall be not less than the estimated amount of 
tax which may at any time constitute a charge against the bond: 
Provided, That the amount of any such bond (or the total amount where 
original and strengthening bonds are filed) shall not exceed $25,000 nor 
be less than $1,000. The charges against such bond shall be subject to 
increase as withdrawals are made and decrease as required evidence of 
exportation is received by the regional director (compliance) with 
respect to cigars withdrawn. When the limit of liability under a bond 
given in less than the maximum amount has been reached, further 
withdrawals shall not be made thereunder until a strengthening or 
superseding bond is filed as required by Sec. 290.245 or Sec. 290.246.



Sec. 290.245  Strengthening bond.

    Where the regional director (compliance) determines that the amount 
of the bond, under which the customs warehouse proprietor is withdrawing 
cigars for shipment under this subpart, no longer adequately protects 
the revenue, and such bond is in an amount of less than $25,000, the 
regional director (compliance) may require the proprietor to file a 
strengthening bond in an appropriate amount with the same surety as that 
on the bond already in effect, in lieu of a superseding bond to cover 
the full liability on the basis of Sec. 290.244. The regional director 
(compliance) shall refuse to approve any strengthening bond where any 
notation is made thereon which is intended or which may be construed as 
a release of any former bond, or as limiting the amount of either bond 
to less than its full amount.



Sec. 290.246  Superseding bond.

    The customs warehouse proprietor shall file a new bond to supersede 
his current bond, immediately when (a) the corporate surety on the 
current bond becomes insolvent, (b) the regional director (compliance) 
approves a request from the surety on the current bond to terminate his 
liability under the bond, (c) payment of any liability under a bond is 
made by the surety thereon, or (d) the regional director (compliance) 
considers such a superseding bond necessary for the protection of the 
revenue.



Sec. 290.247  Termination of liability of surety under bond.

    The liability of a surety on any bond required by this subpart shall 
be terminated only as to operations on and after the effective date of a 
superseding

[[Page 267]]

bond, or the date of approval of the customs warehouse proprietor's 
request for termination, or otherwise, in accordance with the 
termination provisions of the bond. The surety shall remain bound in 
respect of any liability for unpaid taxes, penalties, and interest, not 
in excess of the amount of the bond, incurred by the proprietor while 
the bond is in force.

                         Packaging Requirements



Sec. 290.248  Packages.

    Cigars shall, before withdrawal under this part, be put up by the 
customs warehouse proprietor in packages which shall bear the label or 
notice, tax classification, and mark, as required by this subpart.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-40, 42 FR 5009, Jan. 26, 1977]



Sec. 290.249  Lottery features.

    No certificate, coupon, or other device purporting to be or to 
represent a ticket, chance, share, or an interest in, or dependent on, 
the event of a lottery shall be contained in, attached to, or stamped, 
marked, written, or printed on any package of cigars withdrawn under 
this subpart.

(72 Stat. 1422; 26 U.S.C. 5723; 18 U.S.C. 1301)



Sec. 290.250  Indecent or immoral material.

    No indecent or immoral picture, print, or representation shall be 
contained in, attached to, or stamped, marked, written, or printed on 
any package of cigars withdrawn under this subpart.

(72 Stat. 1422; 26 U.S.C. 5723)



Sec. 290.251  Mark.

    Every package of cigars shall, before withdrawal from the customs 
warehouse under this subpart, have adequately imprinted thereon, or on a 
label securely affixed thereto, the name and location of the 
manufacturer. There shall also be adequately stated on each such package 
the number of cigars contained in the package.

(72 Stat. 1422; 26 U.S.C. 5723)



Sec. 290.252  Label or notice.

    Every package of cigars shall, before withdrawal from the customs 
warehouse under this subpart, have adequately imprinted thereon, or on a 
label securely affixed the words ``Tax-exempt. For use outside U.S.'' or 
the words ``U.S. Tax-exempt. For use outside U.S.'', except where a 
stamp, sticker, or notice, required by a foreign country or a possession 
of the United States, which identifies such country or possession, is so 
imprinted or affixed.

(72 Stat. 1422; 26 U.S.C. 5723)



Sec. 290.253  Tax classification for cigars.

    Before withdrawal of cigars from a customs warehouse under this 
subpart, every package of cigars shall have adequately imprinted on it, 
or on a label securely affixed to it--
    (a) The designation ``cigars'';
    (b) The quantity of cigars contained in the package; and
    (c) For small cigars, the classification of the product for tax 
purposes (i.e., either ``small'' or ``little'').

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-80, 46 FR 18312, Mar. 24, 1981]



Sec. 290.254  Shipping containers.

    Each shipping case, crate, or other container, in which cigars are 
to be withdrawn, under this subpart, shall bear a distinguishing number, 
such number to be assigned by the customs warehouse proprietor.

                         Consignment of Shipment



Sec. 290.255  Consignment of cigars.

    Cigars withdrawn from a customs warehouse, without payment of tax, 
under internal revenue bond and this part, shall be consigned in the 
same manner as provided by subpart J of this part with respect to the 
removal of tobacco products, and cigarette papers and tubes from a 
factory or an export warehouse.

[T.D. 6871, 31 FR 56, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

[[Page 268]]

                      Notice of Removal of Shipment



Sec. 290.256  Preparation.

    For each shipment to be withdrawn under this subpart, the customs 
warehouse proprietor shall prepare a notice of removal, Form 5200.14. 
Each such notice shall be given a serial number by the proprietor in a 
series beginning with number 1, with respect to the first shipment 
withdrawn under this subpart and commencing again with number 1 on 
January 1 of each year thereafter.

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.257  Disposition.

    After actual withdrawal from his warehouse of the shipment described 
on the notice of removal, Form 5200.14, the customs warehouse proprietor 
shall, except where the shipment is to be exported by parcel post, 
promptly forward one copy of the notice of removal to the regional 
director (compliance) for the region in which is located the customs 
warehouse from which the shipment is withdrawn. A copy of each such 
notice shall be retained by the customs warehouse proprietor as a part 
of his records, for 3 years following the close of the calendar year in 
which the shipment was withdrawn, and shall be made available for 
inspection by any ATF officer upon his request. The proprietor shall 
dispose of the other copies of each notice of removal as required by 
this subpart.

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.258  To officers of the armed forces for subsequent exportation.

    Where cigars are withdrawn from a customs warehouse for delivery to 
officers of the armed forces of the United States in this country for 
subsequent shipment to, and use by, the armed forces outside the United 
States, the customs warehouse proprietor making the shipment shall 
forward a copy of the notice of removal, Form 5200.14, to the officer at 
the base or installation authorized to receive the cigars described on 
the notice of removal. Upon execution by the armed forces receiving 
officer of the certificate of receipt on the copy of the notice of 
removal, he shall return such copy to the customs warehouse proprietor 
making the shipment for filing with the appropriate regional director 
(compliance).

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.259  To noncontiguous foreign countries and possessions of the United States.

    Where cigars are withdrawn from a customs warehouse for direct 
delivery to a vessel or aircraft for transportation to a noncontiguous 
foreign country, Puerto Rico, the Virgin Islands, or a possession of the 
United States, the customs warehouse proprietor making the withdrawal 
shall file two copies of the notice of removal, Form 5200.14, with the 
office of the district director of customs at the port where the 
shipment is to be laden. Such copies of the notice of removal should be 
filed with the related shipper's export declaration, Commerce Form 7525-
V. In the event the copies of the notice of removal are not filed with 
the shipper's export declaration, when the copies of the notice are 
filed with the district director of customs they shall show all 
particulars necessary to enable that officer to associate the notice 
with the related shipper's export declaration and any other documents 
filed with his office in connection with the shipment. After the vessel 
or aircraft on which the shipment has been laden clears or departs from 
the port of lading the customs authority shall execute the certificate 
of exportation on both copies of the notice of removal, retain one copy 
for his records, and deliver or transmit the other copy to the customs 
warehouse proprietor making the shipment for filing with the appropriate 
regional director (compliance).

[T.D. 6961, 33 FR 9494, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.260  To a Federal department or agency.

    Where cigars are withdrawn from a customs warehouse and are destined 
for ultimate delivery in a noncontiguous foreign country, Puerto Rico, 
the Virgin Islands, or a possession of the

[[Page 269]]

United States, but the shipment is to be delivered to a Federal 
department or agency, or to an authorized dispatch agent, transportation 
officer, or port director of such a department or agency for forwarding 
on to the place of destination of the shipment, the customs warehouse 
proprietor making the shipment shall furnish a copy of the notice of 
removal, Form 5200.14, to the Federal department or agency, or an 
officer thereof at the port, receiving the shipment for ultimate 
transmittal to the place of destination, in order that such department, 
agency, or officer, can properly execute the certificate of receipt on 
such notice to evidence receipt of the shipment for transmittal to a 
place beyond the jurisdiction of the internal revenue laws of the United 
States. After completing such certificate, the Federal department, 
agency, or officer, shall return the copy of the notice of removal, so 
executed, to the customs warehouse proprietor making the shipment for 
filing with the appropriate regional director (compliance).

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.261  To contiguous foreign countries.

    Where cigars are withdrawn from a customs warehouse for export to a 
contiguous foreign country, the customs warehouse proprietor making the 
shipment shall furnish to the district director of customs at the border 
or other port of exit two copies of the notice of removal, Form 5200.14, 
together with the related shipper's export declaration, Commerce Form 
7525-V. In the event the copies of the notice of removal are not filed 
with the shipper's export declaration or, in the case of a shipment for 
the armed forces of the United States in the contiguous foreign country 
where no shipper's export declaration is required, the copies of the 
notice when filed with the district director of customs shall show all 
particulars necessary to enable that officer to associate the notice 
with the related shipper's export declaration, if any, and any other 
documents filed with his office in connection with the shipment. After 
the shipment has been cleared by customs from the United States, the 
customs authority at the port of exit shall complete the certificate of 
exportation on both copies of the notice of removal, retain one copy for 
his records, and transmit the other copy to the customs warehouse 
proprietor making the shipment for filing with the appropriate regional 
director (compliance).

[T.D. 6961, 33 FR 9494, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.262  To Government vessels and aircraft for consumption as supplies.

    Where cigars are withdrawn from a customs warehouse for direct 
delivery to a vessel or aircraft, engaged in an activity for the 
Government of the United States or a foreign government, for consumption 
as supplies beyond the jurisdiction of the internal revenue laws of the 
United States, the customs warehouse proprietor making the shipment 
shall forward a copy of the notice of removal, Form 5200.14, to the 
officer of the vessel or aircraft authorized to receive the shipment. 
Upon execution by the receiving officer of the vessel or aircraft of the 
certificate of receipt on the copy of the notice of removal, he shall 
return such copy to the customs warehouse proprietor making the shipment 
for filing with the appropriate regional director (compliance).

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.263  To commercial vessels and aircraft for consumption as supplies.

    Where cigars are withdrawn from a customs warehouse for delivery to 
a vessel or aircraft entitled to receive such articles for consumption 
as supplies beyond the jurisdiction of the internal revenue laws of the 
United States, the customs warehouse proprietor making shipment shall 
file two copies of the notice of removal, Form 5200.14, with the 
district director of customs at the port where the shipment is to be 
laden in sufficient time to permit delivery of the two copies of the 
notice of removal to the customs officer who will inspect the shipment

[[Page 270]]

and supervise its lading. After inspection and lading of the shipment 
the customs officer shall note on the copies of the notice of removal 
any discrepancy between the shipment inspected and laden under his 
supervision and that described on the notice of removal or any 
limitation on the quantity to be laden; complete and sign the 
certificate of inspection and lading; and return both copies of the 
notice of removal to the district director of customs. The district 
director of customs shall execute the certificate of clearance on both 
copies of the notice of removal, retain one copy for his records, and 
forward the other copy to the customs warehouse proprietor making the 
shipment for filing with the appropriate regional director (compliance). 
Where the vessel or aircraft does not clear from the port at which the 
shipment is laden, the customs officer supervising the lading of the 
shipment shall require the person on board the vessel or aircraft 
authorized to receive the shipment to execute the certificate of receipt 
on both copies of the notice of removal to indicate the trade or 
activity in which the vessel or aircraft is engaged.

[T.D. 6961, 33 FR 9494, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.264  To export warehouses.

    Where cigars are withdrawn from a customs warehouse for delivery to 
an export warehouse, the proprietor of the customs warehouse shall 
forward to the proprietor of the export warehouse three copies of the 
notice of removal, Form 5200.14, covering the shipment, for execution 
and disposition in accordance with procedure similar to that set forth 
in Sec. 290.200 in connection with a shipment of tobacco products, and 
cigarette papers and tubes from a factory to an export warehouse. The 
executed copy of the notice of removal, Form 2149, returned to the 
customs warehouse proprietor by the export warehouse proprietor shall be 
filed with the appropriate regional director (compliance).

[T.D. ATF-48, 44 FR 55856, Sept. 28, 1979, as amended by T.D. ATF-232, 
51 FR 28089, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.264a  To a foreign-trade zone.

    Where cigars are withdrawn from a customs warehouse for delivery to 
a foreign-trade zone, under zone restricted status for the purpose of 
exportation or storage, the customs warehouse proprietor making the 
shipment shall forward two copies of the notice of removal, Form 
5200.14, to the customs officer in charge of the zone. Upon receipt of 
the shipment, the customs officer shall execute the certificate of 
receipt on each copy of the form, noting thereon any discrepancy, retain 
one copy for his records, and forward the other copy to the customs 
warehouse proprietor making the shipment for filing with the appropriate 
regional director (compliance).

[T.D. 6564, 26 FR 4362, May 19, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 290.265  For export by parcel post.

    Where cigars are withdrawn from a customs warehouse for export by 
parcel post, the customs warehouse proprietor shall present one copy of 
the notice of removal, Form 5200.14, together with the shipping 
containers, to the postal authorities with the request that the 
postmaster or his agent execute the certificate of mailing on the form. 
Where a customs warehouse proprietor so desires, he may cover under one 
notice of removal all the cigars removed under this part for export by 
parcel post which are delivered at one time to the postal service for 
that purpose. The customs warehouse proprietor shall immediately file 
the receipted copy of the notice of removal with the appropriate 
regional director (compliance).

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]

                           Return of Shipment



Sec. 290.266  Return of cigars from export warehouses.

    Where cigars are returned to a customs warehouse from an export 
warehouse, the officer in charge of the customs warehouse shall execute 
the certificate of receipt on each of the copies of the related Form 
5200.14 received from the export warehouse proprietor,

[[Page 271]]

after checking the containers to determine whether all the cigars 
described on the notice have been received. Thereafter, both copies of 
the Form 5200.14 shall be turned over to the proprietor of the customs 
warehouse who shall return one copy to the export warehouse proprietor 
for disposition as provided in Sec. 290.201. The customs warehouse 
proprietor shall retain the other copy of the notice of removal, as a 
part of his records, for 3 years following the close of the calendar 
year in which the shipment was received. Such copy shall be made 
available for inspection by any ATF officer upon his request.

[T.D. ATF-48, 44 FR 55856, Sept. 28, 1979, as amended by T.D. ATF-421, 
64 FR 71926, Dec. 22, 1999]



Sec. 290.267  Return of cigars from other sources.

    A customs warehouse proprietor may return to his warehouse cigars 
previously withdrawn therefrom, under this subpart, provided he promptly 
files with the appropriate regional director (compliance) a copy of the 
Form 5200.14 under which the cigars were originally withdrawn, with the 
certificate of receipt properly modified and executed by the customs 
officer in charge of the warehouse to show return of the shipment. If 
less than the entire shipment is returned to the warehouse, the form 
shall state what disposition was made of the remainder of the original 
shipment and any other facts pertinent to such shipment. The customs 
warehouse proprietor shall retain a copy of such form as a part of his 
records for 3 years after the close of the calendar year in which the 
shipment was returned. Such copy shall be made available for inspection 
by any ATF officer upon request.

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



PART 295--REMOVAL OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX FOR USE OF THE UNITED STATES--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
295.1  Removal of tobacco products, and cigarette papers and tubes, 
          without payment of tax, for use of the United States.

                         Subpart B--Definitions

295.11  Meaning of terms.

                  Subpart C--Administrative Provisions

295.21  Alternate methods or procedures.
295.22  Emergency variations from requirements.
295.23  Authority of ATF officers to enter premises.
295.24  Interference with administration.
295.25  Unlawful purchase, receipt, possession, or sale of tobacco 
          products, or cigarette papers or tubes, after removal.

                           Subpart D--Removals

295.31  Restrictions.
295.32  Under manufacturer's bond.
295.33  Return of shipment to factory.
295.34  Loss or shortage in shipment.
295.35  Liability for tax.
295.36  Payment of tax.
295.37  Assessment.

                    Subpart E--Packaging Requirements

295.41  Packages.
295.42  Mark.
295.43  Notice for smokeless tobacco.
295.44  Notice for cigars.
295.45  Notice for cigarettes.
295.45a  Notice for pipe tobacco.
295.45b  Notice for roll-your-own tobacco.
295.45c  Package use-up rule.
295.46  Tax-exempt label.

                           Subpart F--Records

295.51  Supporting records.

    Authority: 26 U.S.C. 5703, 5704, 5705, 5723, 5741, 5751, 5762, 5763, 
6313, 7212, 7342, 7606, 7805, 44 U.S.C. 3504(h).

[[Page 272]]



                     Subpart A--Scope of Regulations



Sec. 295.1  Removal of tobacco products, and cigarette papers and tubes, without payment of tax, for use of the United States.

    This part contains the regulations relating to the removal of 
tobacco products, and cigarette papers and tubes, without payment of 
tax, for use of the United States.

[T.D. 6871, 31 FR 57, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



                         Subpart B--Definitions



Sec. 295.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, the 
following terms shall have the meanings given in this section, unless 
the context clearly indicates otherwise. Words in the plural form shall 
include the singular, and vice versa, and words indicating the masculine 
gender shall include the feminine. The terms ``includes'' and 
``including'' do not exclude things not listed which are in the same 
general class.
    Armed forces. The Army, Navy (including the Marine Corps), Air 
Force, and Coast Guard.
    Associate Director (Compliance Operations). The Associate Director 
(Compliance Operations) in the Bureau of Alcohol, Tobacco and Firearms, 
who is responsible to, and functions under the direction and supervision 
of, the Director.
    ATF officer. An officer of the Bureau of Alcohol, Tobacco and 
Firearms (ATF) authorized to perform any function relating to the 
administration or enforcement of this part.
    Charge of the United States. A patient in a hospital or similar 
institution, or a Federal prisoner, if the hospital, institution, or 
prison is operated by a Federal agency and the support or care of such 
person results in a charge on, or an expense to, the United States 
Government.
    Chewing tobacco. Any leaf tobacco that is not intended to be smoked.
    Cigar. Any roll of tobacco wrapped in leaf tobacco or in any 
substance containing tobacco (other than any roll of tobacco which is a 
cigarette within the meaning of paragraph (2) of the definition for 
cigarette).
    Cigarette. (1) Any roll of tobacco wrapped in paper or in any 
substance not containing tobacco, and
    (2) Any roll of tobacco wrapped in any substance containing tobacco 
which, because of its appearance, the type of tobacco used in the 
filler, or its packaging and labeling, is likely to be offered to, or 
purchased by, consumers as a cigarette described in paragraph (1) of 
this definition.
    Cigarette paper. Paper, or any other material except tobacco, 
prepared for use as a cigarette wrapper.
    Cigarette papers. Taxable books or sets of cigarette papers, i.e., 
books or sets of cigarette papers containing more than 25 papers each.
    Cigarette tube. Cigarette paper made into a hollow cylinder for use 
in making cigarettes.
    District director. A district director of internal revenue.
    Factory. The premises of a manufacturer of tobacco products or 
cigarette papers and tubes in which he carries on such business.
    Federal agency. A department or agency of the United States 
Government, including the American National Red Cross, and the U.S. 
Soldiers Home, Washington, D.C.
    Large cigarettes. Cigarettes weighing more than three pounds per 
thousand.
    Large cigars. Cigars weighing more than three pounds per thousand.
    Manufacturer of cigarette papers and tubes. Any person who makes up 
cigarette paper into books or sets containing more than 25 papers each, 
or into tubes, except for his own personal use or consumption.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Package. The container in which tobacco products or cigarette papers 
or

[[Page 273]]

tubes are put up by the manufacturer and offered for sale or delivery to 
the consumer.
    Person. An individual, partnership, association, company, 
corporation, estate, or trust.
    Pipe tobacco. Any tobacco which, because of its appearance, type, 
packaging, or labeling, is suitable for use and likely to be offered to, 
or purchased by, consumers as tobacco to be smoked in a pipe.
    Region. A Bureau of Alcohol, Tobacco and Firearms Region.
    Regional Director (compliance). The principal regional official 
responsible for administering regulations in this part.
    Removal or remove. The removal of tobacco products or cigarette 
papers or tubes from the factory.
    Roll-your-own tobacco. Any tobacco which, because of its appearance, 
type, packaging, or labeling, is suitable for use and likely to be 
offered to, or purchased by, consumers as tobacco for making cigarettes.
    Sale price. The price for which large cigars are sold by the 
manufacturer or importer, determined in accordance with Secs. 270.22 or 
275.39 and used in computation of the tax.
    Small cigarettes. Cigarettes weighing not more than three pounds per 
thousand.
    Small cigars. Cigars weighing not more than three pounds per 
thousand.
    Smokeless tobacco. Any chewing tobacco or snuff.
    Snuff. Any finely cut, ground, or powdered tobacco that is not 
intended to be smoked.
    This chapter. Chapter I, title 26, Code of Federal Regulations.
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    United States. When used in a geographical sense shall include only 
the States and the District of Columbia.
    U.S.C. The United States Code.

[T.D. ATF-48, 43 FR 13557, Mar. 31, 1978; 44 FR 55856, Sept. 28, 1979, 
as amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 
FR 43194, Dec. 1, 1986; T.D. ATF-289, 54 FR 48842, Nov. 27, 1989; T.D. 
ATF-424, 64 FR 71933, Dec. 22, 1999; T.D. ATF-420, 64 FR 71945, Dec. 22, 
1999]



                  Subpart C--Administrative Provisions



Sec. 295.21  Alternate methods or procedures.

    A manufacturer, on specific approval by the Director as provided in 
this section, may use an alternate method or procedure in lieu of a 
method or procedure specifically prescribed in this part. The Director 
may approve an alternate method or procedure, subject to stated 
conditions, when he finds that:
    (a) Good cause has been shown for the use of the alternate method or 
procedure.
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue, and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part.

No alternate method or procedure relating to the giving of any bond or 
to the assessment, payment, or collection of tax, shall be authorized 
under this section. Where a manufacturer desires to employ an alternate 
method or procedure, he shall submit a written application to do so, in 
triplicate, to the regional director (compliance) for transmittal to the 
Director. The application shall specifically describe the proposed 
alternate method or procedure, and shall set forth the reasons therefor. 
Alternate methods or procedures shall not be employed until the 
application has been approved by the Director. The manufacturer shall, 
during the period of authorization of an alternate method or procedure, 
comply with the terms of the approved application. Authorization for any 
alternate method or procedure may be withdrawn whenever in the judgment 
of the Director the revenue is jeopardized or the effective 
administration of this part is hindered. The manufacturer shall retain, 
as part of his records, any authorization of the Director under this 
section for three

[[Page 274]]

years following the close of the calendar year in which the operation 
under such authorization is concluded.



Sec. 295.22  Emergency variations from requirements.

    The Director may approve methods of operation other than as 
specified in this part, where he finds that an emergency exists and the 
proposed variations from the specified requirements are necessary, and 
the proposed variations:
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications.
    (b) Will not hinder the effective administration of this part, and
    (c) Will not be contrary to any provision of law.

Variations from requirements granted under this section are conditioned 
on compliance with the procedures, conditions, and limitations set forth 
in the approval of the application. Failure to comply in good faith with 
such procedures, conditions, and limitations shall automatically 
terminate the authority for such variations and the manufacturer 
thereupon shall fully comply with the prescribed requirements of 
regulations from which the variations were authorized. Authority for any 
variations may be withdrawn whenever in the judgment of the Director the 
revenue is jeopardized or the effective administration of this part is 
hindered by the continuation of such variation. Where a manufacturer 
desires to employ such variation, he shall submit a written application 
to do so, in triplicate, to the regional director (compliance) for 
transmittal to the Director. The application shall describe the proposed 
variations and set forth the reasons therefor. Variations shall not be 
employed until the application has been approved. The manufacturer shall 
retain, as part of his records, any authorization of the Director under 
this section for three years following the close of the calendar year in 
which the operation under such authorization is concluded.

[27 FR 4476, May 10, 1962. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 295.23  Authority of ATF officers to enter premises.

    Any ATF officer may enter in the daytime any premises where tobacco 
products, or cigarette papers or tubes removed under this part are kept, 
so far as it may be necessary for the purpose of examining such 
articles. When such premises are open at night, any ATF officer may 
enter them, while so open, in the performance of his official duties. 
The owner of such premises, or person having the superintendence of the 
same, who refuses to admit any ATF officer or permit him to examine the 
articles removed under this part shall be liable to the penalties 
prescribed by law for the offense.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 57, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 295.24  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this part, or endeavors to 
intimidate or impede any ATF officer acting in his official capacity, or 
forcibly rescues or attempts to rescue or causes to be rescued any 
property, after it has been duly seized for forfeiture to the United 
States in connection with a violation of the internal revenue laws, 
shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)

[27 FR 4476, May 10, 1962. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 295.25  Unlawful purchase, receipt, possession, or sale of tobacco products, or cigarette papers or tubes, after removal.

    Any person who, with intent to defraud the United States, purchases, 
receives, possesses, offers for sale, or sells or otherwise disposes of 
tobacco products, or cigarette papers or tubes which, after removal 
under this part, without payment of tax, have been diverted from the 
purpose or use specified in this part, shall be subject to the

[[Page 275]]

criminal penalties and provisions for forfeiture prescribed by law.

(72 Stat. 1424, 1425, as amended, 1426; 26 U.S.C. 5751, 5762, 5763)

[T.D. 6871, 31 FR 57, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



                           Subpart D--Removals

    Source: T.D. 6871, 31 FR 57, Jan. 14, 1966. Redesignated at 40 FR 
16835, Apr. 15, 1975.



Sec. 295.31  Restrictions.

    Tobacco products, and cigarette papers and tubes purchased by a 
Federal agency with funds appropriated by the Congress of the United 
States may be removed, without payment of tax, in accordance with this 
part, for delivery to such Federal agency for gratuitous distribution 
under the supervision of such agency. Such articles purchased by a donor 
from a manufacturer, or donated directly by a manufacturer, may also be 
removed, without payment of tax, in accordance with this part, for 
delivery to a Federal agency for gratuitous distribution under the 
supervision of such agency to (a) charges of the United States or (b) 
patients in a hospital or institution operated by the Government of a 
State or the District of Columbia where the Federal agency maintains a 
program for such distribution to members or veterans of the armed forces 
of the United States in such hospital or institution. Tobacco products, 
and cigarette papers and tubes removed under the provisions of this part 
may not be sold subsequent to removal.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 57, as amended by T.D. ATF-243, 51 FR 28090, Aug. 5, 
1986; 51 FR 43194, Dec. 1, 1986]



Sec. 295.32  Under manufacturer's bond.

    Removals of tobacco products, and cigarette papers and tubes under 
this part shall be made under the bond filed by the manufacturer of such 
articles to cover the operations of his factory as required by section 
5711, I.R.C., and regulations issued thereunder.

(72 Stat. 1418, as amended, 1421, as amended; 26 U.S.C. 5704, 5711)

[T.D. 6871, 31 FR 57, as amended by T.D. ATF-243, 51 FR 28090, Aug. 5, 
1986; 51 FR 43194, Dec. 1, 1986]



Sec. 295.33  Return of shipment to factory.

    Tobacco products, and cigarette papers and tubes which have been 
removed, under this part, may be returned to the factory without 
internal revenue supervision.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 57, as amended by T.D. ATF-243, 51 FR 28090, Aug. 5, 
1986; 51 FR 43194, Dec. 1, 1986]



Sec. 295.34  Loss or shortage in shipment.

    Immediately upon receipt of information of a loss of all or part of 
a shipment, or of a shortage therein, of tobacco products, or cigarette 
papers or tubes removed under this part, the manufacturer shall notify 
the regional director (compliance) for the region in which the factory 
from which the articles were removed is located, furnish all pertinent 
details with respect to the loss or shortage, and either pay the tax due 
thereon in accordance with the provisions of Sec. 295.36, or file claim 
for remission of the tax liability under the provisions of part 270 of 
this chapter, as the case may be.

(72 Stat. 1417, 1419, as amended; 26 U.S.C. 5703, 5705)

[T.D. 6871, 31 FR 57, as amended by T.D. ATF-243, 51 FR 28090, Aug. 5, 
1986; 51 FR 43194, Dec. 1, 1986; T.D. ATF-384, 61 FR 54096, Oct. 17, 
1996]



Sec. 295.35  Liability for tax.

    The manufacturer who removes tobacco products, or cigarette papers 
or tubes under this part shall be liable for the taxes imposed thereon 
by 26 U.S.C. 5701, until such tobacco products, or cigarette papers or 
tubes are received by the Federal agency. Any person who possesses 
tobacco products, or cigarette papers or tubes in violation of 26 U.S.C. 
5751(a)(1) or (2), shall be liable

[[Page 276]]

for a tax equal to the tax on such articles.

(72 Stat. 1417, 1424; 26 U.S.C. 5703, 5751)

[T.D. 6871, 31 FR 57, Jan. 14, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



Sec. 295.36  Payment of tax.

    Any tax which becomes due and payable on tobacco products, and 
cigarette papers and tubes removed under this part shall be paid to 
regional director (compliance), for the region in which the factory from 
which such articles were removed is located, with sufficient information 
to identify the taxpayer, the nature and purpose of the payment, and the 
articles covered by the payment: Provided, That a manufacturer of 
tobacco products or cigarette papers or tubes may pay any tax for which 
he becomes liable under this part by an appropriate adjustment in his 
current tax return Form 5000.24. In paying the tax, a fractional part of 
a cent shall be disregarded unless it amounts to one-half cent or more, 
in which case it shall be increased to one cent.

[T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-251, 52 FR 19341, May 22, 1987]



Sec. 295.37  Assessment.

    Whenever any person required by law to pay tax on tobacco products, 
and cigarette papers and tubes fails to pay such tax, the tax shall be 
ascertained and assessed against such person, subject to the limitations 
prescribed in 26 U.S.C. 6501. The tax so assessed shall be in addition 
to the penalties imposed by law for failure to pay such tax when 
required. Except in cases where delay may jeopardize collection of the 
tax, or where the amount is nominal or the result of an evident 
mathematical error, no such assessment shall be made until and after 
notice has been afforded such person to show cause against assessment. 
The person will be allowed 45 days from the date of such notice to show 
cause, in writing, against such assessment.

(72 Stat. 1417; 26 U.S.C. 5703)

[T.D. 6871, 31 FR 57, Jan. 14, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



                    Subpart E--Packaging Requirements



Sec. 295.41  Packages.

    All tobacco products, and cigarette papers and tubes shall, before 
removal under this part, be put up by the manufacturer in packages which 
shall be of such construction as will securely contain the articles 
therein and maintain the mark, notice, and label thereon, as required by 
this subpart. No package of tobacco products, or cigarette papers or 
tubes shall have contained therein, attached thereto, or stamped, 
marked, written, or printed thereon (a) any certificate, coupon, or 
other device purporting to be or to represent a ticket, chance, share, 
or an interest in, or dependent on, the event of a lottery, or (b) any 
indecent or immoral picture, print, or representation.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 58, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 295.42  Mark.

    Every package of tobacco products shall before removal from the 
factory under this part, have adequately imprinted thereon, or on a 
label securely affixed thereto, a mark as specified in this section. The 
mark may consist of the name of the manufacturer removing the product 
and the location (by city and State) of the factory from which the 
products are to be so removed, or may consist of the permit number of 
the factory from which the products are to be so removed. (Any trade 
name of the manufacturer approved as provided in Sec. 270.65 of this 
chapter may be used in the mark as the name of the manufacturer.) As an 
alternative, where tobacco products are

[[Page 277]]

both packaged and removed by the same manufacturer, either at the same 
or different factories, the mark may consist of the name of such 
manufacturer if the factory where packaged is identified on or in the 
package by a means approved by the Director. Before using the 
alternative, the manufacturer shall notify the Director in writing of 
the name to be used as the name of the manufacturer and the means to be 
used for identifying the factory where packaged. If approved by him the 
Director shall return approved copies of the notice to the manufacturer. 
A copy of the approved notice shall be retained as part of the factory 
records at each of the factories operated by the manufacturer.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 58, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 295.43  Notice for smokeless tobacco.

    (a) Product designation. Every package of chewing tobacco or snuff 
shall, before removal under this part, have adequately imprinted 
thereon, or on a label securely affixed thereto, the designation 
``chewing tobacco'' or ``snuff.'' As an alternative, packages of chewing 
tobacco may be designated ``Tax Class C,'' and packages of snuff may be 
designated ``Tax Class M.''
    (b) Product weight. Every package of chewing tobacco or snuff shall, 
before removal under this part, have adequately imprinted thereon, or on 
a label securely affixed thereto, a clear statement of the actual pounds 
and ounces of the product contained therein. As an alternative, the 
shipping cases containing packages of chewing tobacco or snuff may, 
before removal, have adequately imprinted thereon, or on a label 
securely affixed thereto, a clear statement, in pounds and ounces, of 
the total weight of the product, the tax class of the product, and the 
total number of the packages of product contained therein.

(Approved by the Office of Management and Budget under control number 
1512-0488)

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986]



Sec. 295.44  Notice for cigars.

    Before removal under this part, every package of cigars shall have 
adequately imprinted on it, or on a label securely affixed to it--
    (a) The designation ``cigars'';
    (b) The quantity of cigars contained in the package; and
    (c) For small cigars, the classification of the product for tax 
purposes (i.e., either ``small'' or ``little'').

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-80, 46 FR 18312, Mar. 24, 1981]



Sec. 295.45  Notice for cigarettes.

    Every package of cigarettes shall, before removal under this part, 
have adequately imprinted thereon, or on a label securely affixed 
thereto, the designation ``cigarettes'', the quantity of such product 
contained therein, and the classification for tax purposes, i.e., for 
small cigarettes, either ``small'' or ``Class A'', and for large 
cigarettes, either ``large'' or ``Class B''.

(72 Stat. 1422; 26 U.S.C. 5723)

[27 FR 4478, May 10, 1962. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 295.45a  Notice for pipe tobacco.

    (a) Product designation. Every package of pipe tobacco shall, before 
removal subject to tax, have adequately imprinted thereon, or on a label 
securely affixed thereto, the designation ``pipe tobacco.'' As an 
alternative, packages of pipe tobacco may be designated ``Tax Class L.''
    (b) Product weight. Every package of pipe tobacco shall, before 
removal subject to tax, have adequately imprinted thereon, or on a label 
securely affixed

[[Page 278]]

thereto, a clear statement of the actual pounds and ounces of the 
product contained therein.

[T.D. ATF-289, 54 FR 48842, Nov. 27, 1989]



Sec. 295.45b  Notice for roll-your-own tobacco.

    (a) Product designation. Before removal subject to tax, roll-your-
own tobacco must have adequately imprinted on, or on a label securely 
affixed to, the package, the designation roll-your-own tobacco'' or 
``cigarette tobacco'' or ``Tax Class J.''
    (b) Product weight. Before removal subject to tax, roll-your-own 
tobacco must have a clear statement of the actual weight in pounds and 
ounces of the product in the package. This statement must be adequately 
imprinted on, or on a label securely affixed to, the package.

(Approved by the Office of Management and Budget under control number 
1512-0502)

[T.D. ATF-429, 65 FR 57547, Sept. 25, 2000]



Sec. 295.45c  Package use-up rule.

    (a) A manufacturer must have used such packaging for roll-your-own 
tobacco before January 1, 2000.
    (b) A manufacturer of roll-your-own tobacco, may continue to place 
roll-your-own tobacco in packages that do not meet the marking 
requirements of Secs. 270.212 and 270.216b(b) until April 1, 2000.
    (c) A manufacturer of roll-your-own tobacco may continue to place 
roll-your-own tobacco in packages that do not meet the marking 
requirements of Sec. 270.216b(a) until October 1, 2000.

[T.D. ATF-427, 65 FR 40051, June 29, 2000]



Sec. 295.46  Tax-exempt label.

    Every package of tobacco products, and cigarette papers and tubes 
removed under this part shall have the words ``Tax-Exempt. For Use of 
U.S. Not To Be Sold.'' adequately imprinted on the package or on a label 
securely affixed thereto.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 58, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



                           Subpart F--Records



Sec. 295.51  Supporting records.

    (a) Records of removals. Every manufacturer who removes tobacco 
products, and cigarette papers and tubes under this part must, in 
addition to the records kept under part 270 of this chapter, keep a 
supporting record of such removals and must make appropriate entries 
therein at the time of removal. The supporting record for each removal 
must show:
    (1) The date of removal;
    (2) The name and address of the Federal agency to which shipped or 
delivered;
    (3) The kind and quantity and,
    (4) for large cigars, the sale price.
    (b) Records of returns. If any tobacco products, or cigarette papers 
or tubes removed under this part are returned to the factory, such 
returns must be noted in the supporting record.
    (c) Commercial records. Where the manufacturer keeps, at the 
factory, copies of invoices or other commercial records containing the 
information required as to each removal, in such manner that the 
information may be readily ascertained therefrom, such copies will be 
considered the supporting record required by this section.
    (d) Retention period. The manufacturer must retain the supporting 
record for 3 years following the close of the year covered therein. The 
record must be made available for inspection by any ATF officer upon 
request.

(Approved by the Office of Management and Budget under control number 
1512-0363)

(See 26 U.S.C. 5741)

[T.D. ATF-420, 64 FR 71945, Dec. 22, 1999]



PART 296--MISCELLANEOUS REGULATIONS RELATING TO TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES--Table of Contents




   Subpart A--Application of 26 U.S.C. 6423, as Amended, to Refund or 
    Credit of Tax on Tobacco Products, and Cigarette Papers and Tubes

                                 General

Sec.
296.1  Scope of regulations in this subpart.
296.2  Meaning of terms.

[[Page 279]]

296.3  Applicability to certain credits or refunds.
296.4  Ultimate burden.
296.5  Conditions to allowance of credit or refund.
296.6  Requirements for persons intending to file claim.

                             Claim Procedure

296.7  Execution and filing of claim.
296.8  Data to be shown in claim.
296.9  Time for filing claim.

                                  Bond

296.10  Bond, Form 2490.
296.11  Corporate surety.
296.12  Deposit of securities in lieu of corporate surety.
296.13  Authority to approve bonds.
296.14  Termination of liability.
296.15  Release of pledged securities.

                                Penalties

296.16  Penalties.

Subpart B [Reserved]

                     Subpart C--Disaster Loss Claims

296.71  Scope of subpart.

                               Definitions

296.72  Meaning of terms.

                                Payments

296.73  Circumstances under which payment may be made.

                            Claims Procedure

296.74  Execution of claims.
296.75  Required information for claim.
296.76  Supporting evidence.
296.77  Time and place of filing.
296.78  Action by regional director (compliance).

     Destruction of Tobacco Products, and Cigarette Papers and Tubes

296.79  Supervision.

                                Penalties

296.80  Penalties.

                        Administrative Provisions

296.81  Delegations of the Director.

Subparts D-E [Reserved]

                  Subpart F--Distribution of Cigarettes

                                 General

296.141  Scope of subpart.
296.142  Territorial extent.
296.143  Meaning of terms.

                                 Records

296.146  General requirements.
296.147  Required information.
296.150  Retention of records.

       Other Provisions Relating to the Distribution of Cigarettes

296.153  Authority of ATF officers to enter business premises.

                       Penalities and Forfeitures

296.154  Penalties.
296.155  Forfeitures.

                 Subpart G--Dealers in Tobacco Products

296.161  Scope of subpart.
296.162  Territorial extent.
296.163  Meaning of terms.
296.164  Authority of ATF officers to enter premises.
296.165  Interference with administration.
296.166  Dealing in tobacco products.
296.167  Liability to tax.
296.168  Liability to penalties and forfeitures.

Subpart H [Reserved]

 Subpart I--Floor Stocks Tax on Cigarettes Held for Sale on January 1, 
                       2000 and on January 1, 2002

                                 General

296.191  Purpose of this subpart.
296.192  Terms used in this subpart.
296.193  Floor stocks tax defined.
296.194  Persons liable for this tax.
296.195  Persons not liable for this tax.
296.196  Floor stocks requirements.

                               Inventories

296.201  Establish quantities of cigarettes.
296.202  Inventory for cigarettes with export markings.
296.203  How to identify cigarettes with export markings.
296.204  When to take inventory.
296.205  Physical inventory requirements.
296.206  Book or record inventory requirements.
296.207  Cigarettes in transit.
296.208  Guidelines to determine title of cigarettes in transit.
296.209  Cigarettes in a foreign trade zone.
296.210  Cigarettes held in bond.
296.211  Unmerchantable cigarettes.
296.212  Cigarettes in vending machines.
296.213  Cigarettes marked ``not for sale'' or ``complimentary''.

                          Compute Tax Liability

296.221  Determine amount of tax due.
296.222  Floor stocks tax rates.
296.223  Apply tax credit.

[[Page 280]]

                           Filing Requirements

296.231  How to obtain a tax return.
296.232  Prepare tax return.
296.233  How to pay.
296.234  Tax return due dates.
296.235  Filing requirements for multiple locations.
296.236  Cigarettes in a warehouse.
296.237  Controlled group members.

                                 Records

296.241  Required records.
296.242  Period for maintaining records.
296.243  Cigarettes at multiple locations.
296.244  Where records must be maintained.
296.245  Errors in records.

                                 Claims

296.251  Before filing a claim.
296.252  When to file a claim for errors on return.
296.253  How to file a claim for errors on return.
296.254  Destruction of cigarettes by a Presidentially-declared major 
          disaster.
296.255  Additional reasons for filing a claim.

                     Alternate Methods or Procedures

296.261  Purpose of an alternate method or procedure.
296.262  How to apply for approval.
296.263  Conditions for approval.
296.264  Withdrawal of an alternate method or procedure.

                             ATF Authorities

296.270  Delegations of the Director.
296.271  Entry, examination and testimony.
296.272  Issuance of summons.
296.273  Refusing entry or examination.
296.274  Penalties for failure to comply.

    Authority: 18 U.S.C. 2341-2346, 26 U.S.C. 5708, 5751, 5761-5763, 
6001, 6601, 6621, 6622, 7212, 7342, 7602, 7606, 7805, 44 U.S.C. 3504(h), 
49 U.S.C. 782, unless otherwise noted.

    Cross Reference: For exportation of tobacco materials, tobacco 
products, and cigarette papers and tubes, without payment of tax, or 
with drawback of tax, see part 290 of this subchapter.



   Subpart A--Application of 26 U.S.C. 6423, as Amended, to Refund or 
    Credit of Tax on Tobacco Products, and Cigarette Papers and Tubes

    Source: T.D. 6395, 24 FR 599, Jan. 28, 1959, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.

                                 General



Sec. 296.1  Scope of regulations in this subpart.

    The regulations in this subpart relate to the limitations imposed by 
26 U.S.C. 6423, on the refund or credit of tax paid or collected in 
respect to any article of a kind subject to a tax imposed by 26 U.S.C. 
chapter 52.

[T.D. ATF-48, 44 FR 55857, Sept. 28, 1979]



Sec. 296.2  Meaning of terms.

    When used in this subpart, where not otherwise distinctly expressed 
or manifestly incompatible with the intent thereof, terms shall have the 
meaning ascribed in this section.
    Article. The commodity in respect to which the amount claimed was 
paid or collected as a tax.
    Claimant. Any person who files a claim for a refund or credit of tax 
under this subpart.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Owner. A person who, by reason of a proprietary interest in the 
article, furnished the amount claimed to the claimant for the purpose of 
paying the tax.
    Person. An individual, a trust, estate, partnership, association, 
company, or corporation.
    Regional Director (compliance). The principal ATF regional 
regulatory official responsible for administering regulations in this 
subpart.
    Tax. Any tax imposed by 26 U.S.C. chapter 52, or by any 
corresponding provision of prior internal revenue laws, and in the case 
of any commodity of a kind subject to a tax under such chapter, any tax 
equal to any such tax, any additional tax, or any floor stocks tax. The 
term includes an exaction denominated a ``tax'', and any penalty, 
addition to tax, additional amount, or interest applicable to any such 
tax.

[T.D. 6395, 24 FR 599, Jan. 28, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975]

    Editorial Note: For Federal Register citations affecting Sec. 296.2, 
see the List of CFR Sections Affected in the Finding Aids section of 
this volume.

[[Page 281]]



Sec. 296.3  Applicability to certain credits or refunds.

    The provisions of this subpart apply only where the credit or refund 
is claimed on the grounds that an amount of tax was assessed or 
collected erroneously, illegally, without authority, or in any manner 
wrongfully, or on the grounds that such amount was excessive. This 
subpart does not apply to:
    (a) Any claim for drawback,
    (b) Any claim made in accordance with any law expressly providing 
for credit or refund where an article is withdrawn from the market, 
returned to bond, lost, or destroyed, and
    (c) Any claim based solely on errors in computation of the quantity 
of an article subject to tax or on mathematical errors in computation of 
the amount of the tax due, or to any claim in respect of tax collected 
or paid on an article seized and forfeited, or destroyed, as contraband.

[T.D. 6395, 24 FR 599, Jan. 28, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-42, 42 FR 8372, Feb. 10, 1977]



Sec. 296.4  Ultimate burden.

    For the purposes of this subpart, the claimant, or owner, shall be 
treated as having borne the ultimate burden of an amount of tax only if:
    (a) He has not, directly or indirectly, been relieved of such burden 
or shifted such burden to any other person,
    (b) No understanding or agreement exists for any such relief or 
shifting, and
    (c) If he has neither sold nor contracted to sell the articles 
involved in such claim, he agrees that there will be no such relief or 
shifting, and furnishes bond as provided in Sec. 296.10.



Sec. 296.5  Conditions to allowance of credit or refund.

    No credit or refund to which this subpart is applicable shall be 
allowed or made, pursuant to a court decision or otherwise, of any 
amount paid or collected as a tax unless a claim therefor has been 
filed, as provided in this subpart, by the person who paid the tax and 
the claimant, in addition to establishing that he is otherwise legally 
entitled to credit or refund of the amount claimed, establishes:
    (a) That he bore the ultimate burden of the amount claimed, or
    (b) That he has unconditionally repaid the amount claimed to the 
person who bore the ultimate burden of such amount, or
    (c) That (1) the owner of the article furnished him the amount 
claimed for payment of the tax, (2) he has filed with the regional 
director (compliance) the written consent of such owner to the allowance 
to the claimant of the credit or refund, and (3) such owner satisfies 
the requirements of paragraph (a) or (b) of this section.



Sec. 296.6  Requirements for persons intending to file claim.

    Any person who, having paid the tax with respect to an article, 
desires to claim refund or credit of any amount of such tax to which the 
provisions of this subpart are applicable must:
    (a) File a claim, as provided in Sec. 296.7,
    (b) Comply with any other provisions of law or regulations which may 
apply to the claim, and
    (c) If, at the time of filing the claim, neither he nor the owner 
has sold or contracted to sell the articles involved in the claim, file 
a bond on Form 2490, as provided by Sec. 296.10.

                             Claim Procedure



Sec. 296.7  Execution and filing of claim.

    Claims to which this subpart is applicable shall be executed on Form 
2635 (5620.8) in accordance with instructions on the form and shall be 
filed with the regional director (compliance) for the region in which 
the tax was paid. (For provisions relating to hand-carried documents, 
see Sec. 70.304 of this chapter.) The claim shall set forth each ground 
upon which the claim is made in sufficient detail to apprise the 
regional director (compliance) of the exact basis therefor. Allegations 
pertaining to the bearing of the ultimate burden relate to additional 
conditions which must be established for a claim to be allowed and are 
not in themselves legal grounds for allowance of a claim. There shall 
also be attached to the form and made a part of the claim the supporting 
data required by Sec. 296.8. All evidence relied upon in support of such

[[Page 282]]

claim shall be clearly set forth and submitted with the claim.

[T.D. 7008, 34 FR 3672, Mar. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55857, Sept. 28, 1979; T.D. 
ATF-251, 52 FR 19342, May 22, 1987; T.D. ATF-301, 55 FR 47658, Nov. 14, 
1990]



Sec. 296.8  Data to be shown in claim.

    Claims to which this subpart is applicable, in addition to the 
requirements of Sec. 296.7, must set forth or contain the following:
    (a) A statement that the claimant paid the amount claimed as a 
``tax'' as defined in this subpart.
    (b) Full identification (by specific reference to the form number, 
the date of filing, the place of filing, and the amount paid on the 
basis of the particular form or return) of the tax forms or returns 
covering the payments for which refund or credit is claimed.
    (c) The written consent of the owner to allow the refund or credit 
to the claimant (where the owner of the article on which the tax was 
paid has furnished the claimant the amount claimed for the purpose of 
paying the tax).
    (d) If the claimant or the owner, as the case may be, has neither 
sold nor contracted to sell the articles involved in the claim, a 
statement that the claimant or the owner, as the case may be, agrees not 
to shift, directly or indirectly in any manner whatsoever, the burden of 
the tax to any other person.
    (e) If the claim is for refund of a floor stocks tax, or of an 
amount resulting from an increase in rate of tax applicable to an 
article, a statement as to whether the price of the article was 
increased on or following the effective date of such floor stocks tax or 
rate increase, and, if so, the date of the increase, together with full 
information as to the amount of such price increase.
    (f) Specific evidence (such as relevant records, invoices, or other 
documents, or affidavits of individuals having personal knowledge of 
pertinent facts) which will satisfactorily establish the conditions of 
allowance set forth in Sec. 296.5.

The regional director (compliance) may require the claimant to furnish 
as a part of the claim such additional information as he may deem 
necessary.

[T.D. ATF-42, 42 FR 8372, Feb. 10, 1977]



Sec. 296.9  Time for filing claim.

    No credit or refund of any amount of tax to which the provisions of 
this subpart apply shall be made unless the claimant files a claim 
therefor within the time prescribed by law and in accordance with the 
provisions of this subpart.

[T.D. ATF-42, 42 FR 8373, Feb. 10, 1977]

                                  Bond



Sec. 296.10  Bond, Form 2490.

    Each claim for a refund or credit of tax on articles which the 
claimant or the owner, as the case may be, has neither sold nor 
contracted to sell at the time of filing of the claim must be 
accompanied by a bond on Form 2490. The bond shall be executed by the 
claimant or the owner of the articles, as the case may be, in accordance 
with the provisions of this subpart and the instructions printed on the 
form. Such bond shall be conditioned that there will be no relief or 
shifting of the ultimate burden of the tax to any other person. The 
penal sum shall not be less than the amount of tax claimed on all 
articles which have not been sold or contracted for sale at the time of 
filing of the claim. Bonds required by this subpart shall be given with 
corporate surety or with collateral security. A separate bond must be 
filed for each claim.



Sec. 296.11  Corporate surety.

    (a) Surety bonds required under the provisions of this subpart may 
be given only with corporate sureties holding certificates of authority 
from the Secretary of the Treasury as acceptable sureties on Federal 
bonds. Limitations concerning corporate sureties are prescribed by the 
Secretary in the current revision of the Treasury Department Circular 
No. 570 (refer to paragraph (c) of this section). The surety shall have 
no interest whatever in the business covered by the bond.
    (b) Each bond and each extension of coverage of bond shall at the 
time of filing be accompanied by a power of attorney authorizing the 
agent or officer

[[Page 283]]

who executed the bond to so act on behalf of the surety. The regional 
director (compliance) who is authorized to approve the bond may, 
whenever he deems it necessary, require additional evidence of the 
authority of the agent or officer to execute the bond or extension of 
coverage of bond. The power of attorney shall be prepared on a form 
provided by the surety company and executed under the corporate seal of 
the company. If the power of attorney submitted is other than a manually 
signed document, it shall be accompanied by a certificate of its 
validity.
    (c) Treasury Department Circular No. 570 (Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies) is published in the Federal Register 
annually as of the first workday in July. As they occur, interim 
revisions of the circular are published in the Federal Register. Copies 
may be obtained from the Audit Staff, Bureau of Government Financial 
Operations, Department of the Treasury, Washington, DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7); sec. 
202, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5711))

[T.D. ATF-92, 46 FR 46923, Sept. 23, 1981]



Sec. 296.12  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the principal may pledge and deposit 
securities which are transferable and are guaranteed as to both interest 
and principal by the United States, in accordance with the provisions of 
31 CFR part 225.



Sec. 296.13  Authority to approve bonds.

    Assistant regional commissioners are authorized to approve all bonds 
required by this subpart.



Sec. 296.14  Termination of liability.

    Bonds on Form 2490 will be terminated by the regional director 
(compliance) on receipt of satisfactory evidence that the person giving 
the bond has disposed of the articles covered by the bond and that he 
bore the ultimate burden of the amount claimed and that no understanding 
or agreement exists whereby he will be relieved of such burden or shift 
such burden to another person.



Sec. 296.15  Release of pledged securities.

    Securities of the United States, pledged and deposited as provided 
by Sec. 296.12, shall be released only in accordance with the provisions 
of 31 CFR part 225. When the regional director (compliance) is satisfied 
that they may be released, he shall fix the date or dates on which a 
part or all of such securities may be released. At any time prior to the 
release of such securities, the regional director (compliance) may, for 
proper cause, extend the date of release for such additional length of 
time as he deems necessary.

                                Penalties



Sec. 296.16  Penalties.

    It is an offense punishable by fine and imprisonment for anyone to 
make or cause to be made any false or fraudulent claim upon the United 
States, or to make any false or fraudulent statements, or 
representations, in support of any claim, or to falsely or fraudulently 
execute any documents required by the provisions of the internal revenue 
laws, or any regulations made in pursuance thereof.

Subpart B [Reserved]



                     Subpart C--Disaster Loss Claims



Sec. 296.71  Scope of subpart.

    This subpart prescribes the requirements necessary to implement 26 
U.S.C. 5708, concerning payments which may be made by the United States 
in respect to the internal revenue taxes paid or determined and customs 
duties paid on tobacco products, and cigarette papers and tubes removed, 
which were lost, rendered unmarketable, or condemned by a duly 
authorized official by reason of a disaster occurring in the United 
States on or after September 3, 1958.

[T.D. 6871, 31 FR 59, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55857, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]

[[Page 284]]

                               Definitions



Sec. 296.72  Meaning of terms.

    When used in this subpart, the following terms shall have the 
meanings given in this section, unless the context clearly indicates 
otherwise. Words in the plural form shall include the singular, and vice 
versa, and words indicating the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not listed which are in the same general class.
    Act. The Excise Tax Technical Changes Act of 1958 (Pub. L. 85-859, 
72 Stat. 1275), enacted September 2, 1958.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.15, Delegation Order--Delegation of Certain of the Director's 
Authorities in 27 CFR Parts 270, 275, and 296.
    Associate Director (Compliance Operations). The Associate Director 
(Compliance Operations) in the Bureau of Alcohol, Tobacco and Firearms, 
who is responsible to, and functions under the direction and supervision 
of, the Director.
    Claimant. The person who held the tobacco products or cigarette 
papers and tubes for sale at the time of the disaster and who files 
claim under this subpart.
    Commissioner of Customs. The Commissioner of Customs, U.S. Customs 
Service, The Department of the Treasury, Washington, DC.
    Disaster. A flood, fire, hurricane, earthquake, storm, or other 
catastrophe which has occurred in any part of the United States on and 
after the day following the date of enactment of the act and which the 
President of the United States has determined, under the Act of 
September 30, 1950 (64 Stat. 1109; 42 U.S.C. 1855), was a ``major 
disaster'' as defined in such Act.
    Duly authorized official. Any Federal, State, or local government 
official in whom has been vested authority to condemn tobacco products 
and cigarette papers and tubes made the subject of a claim under this 
subpart.
    Duty or duties. Any duty or duties paid under the customs laws of 
the United States.
    Region. A geographical region of the Bureau of Alcohol, Tobacco and 
Firearms.
    Regional Director (compliance). The principal ATF regional official 
responsible for administering regulations in this part.
    Removal or remove. The removal of tobacco products or cigarette 
papers or tubes from the factory, or release of such articles from 
Customs custody.
    Sale price. The price for which large cigars are sold by the 
manufacturer or importer, determined in accordance with Secs. 270.22 or 
275.39 and used in computation of the tax.
    Tax paid or determined. The internal revenue tax on tobacco products 
and cigarette papers and tubes which has acutally been paid, or which 
has been determined pursuant to 26 U.S.C. 5703(b), and regulations 
thereunder, at the time of their removal subject to tax payable on the 
basis of a return.
    Tobacco Products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    United States. When used in a geographical sense, includes only the 
States, and the District of Columbia.

[T.D. 6392, 24 FR 5300, June 30, 1959]

    Editorial Note: For Federal Register citations affecting 
Sec. 296.72, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

                                Payments



Sec. 296.73  Circumstances under which payment may be made.

    Regional regulatory administrators shall allow payment (without 
interest) of an amount equal to the amount of tax paid or determined, 
and the Commissioner of Customs shall allow payment (without interest) 
of an amount equal to the amount of customs duty paid, on tobacco 
products, and cigarette papers and tubes removed, which are lost, 
rendered unmarketable, or condemned by a duly authorized official by 
reason of a disaster occurring in the United States on and after 
September 3, 1958. Such payments may be

[[Page 285]]

made only if, at the time of the disaster, such tobacco products, or 
cigarette papers or tubes were being held for sale by the claimant. No 
payment shall be made under this subpart with respect to any amount of 
tax or duty claimed or to be claimed under any other provision of law or 
regulations.

[T.D. 6871, 31 FR 59, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                            Claims Procedure



Sec. 296.74  Execution of claims.

    Disaster loss claims for tobacco products or cigarette papers or 
tubes must be executed on ATF Form 2635 (5620.8), Claim--Alcohol, 
Tobacco and Firearms Taxes, in accordance with the instructions on the 
form. If a claim involves taxes on both domestic and imported products, 
the quantities of each must be shown separately in the claim. Prepare a 
separate claim in respect of customs duties.

[T.D. ATF-420, 64 FR 71945, Dec. 22, 1999]



Sec. 296.75  Required information for claim.

    The claim should contain the following information:
    (a) That the tax on such tobacco products, or cigarette papers or 
tubes has been paid or determined and customs duty has been paid;
    (b) That such tobacco products, or cigarette papers or tubes were 
lost, rendered unmarketable, or condemned by a duly authorized official, 
by reason of a disaster;
    (c) The type and date of occurrence of the disaster and the location 
of the tobacco products, or cigarette papers or tubes at that time;
    (d) That the claimant was not indemnified by any valid claim of 
insurance or otherwise in respect of the tax, or tax and duty, on the 
tobacco products, or cigarette papers or tubes covered by the claim;
    (e) That no amount of internal revenue tax or customs duty claimed 
has been or will be otherwise claimed under any other provision of law 
or regulations,
    (f) That the claimant is entitled to payment under this subpart, and
    (g) The claim must set forth the quantity and kind of tobacco 
products and cigarette papers and tubes in sufficient detail to 
calculate the amount of tax and duty paid on these products, 
substantially as shown in the examples below:

                                         [Example using 1993-1999 Rates]
----------------------------------------------------------------------------------------------------------------
               Quantity                             Article                       Rate of tax            Amount
----------------------------------------------------------------------------------------------------------------
20,000................................  Small cigars..................  $1.125 per thousand...........    $22.50
1,000.................................  Large cigars--sale price $100/  12.75% of sale price..........     12.75
                                         thousand.
500...................................  Large cigars--sale price $236/  $30 per thousand..............     15.00
                                         thousand.
10,000................................  Small cigarettes..............  $12 per thousand..............    120.00
5,000.................................  Large cigarettes..............  $25.20 per thousand...........    126.00
2,000 sets............................  Cigarette papers--50 per set..  $0.0075 per set...............     15.00
1,000 sets............................  Cigarette papers--100 per set.  $0.015 per set................     15.00
1,000.................................  Cigarette tubes...............  $0.015 per 50 tubes...........      0.30
100 lbs...............................  Chewing tobacco...............  $0.12 per pound...............     12.00
200 lbs...............................  Snuff.........................  $0.36 per pound...............     72.00
100 lbs...............................  Pipe tobacco..................  $0.675 per pound..............     67.50
300 lbs...............................  Roll-your-own tobacco.........  $0 per pound..................  ........
    Total claimed.....................    ............................    ............................    478.05
----------------------------------------------------------------------------------------------------------------


                                         [Example using 2000-2001 Rates]
----------------------------------------------------------------------------------------------------------------
               Quantity                             Article                       Rate of tax            Amount
----------------------------------------------------------------------------------------------------------------
20,000................................  Small cigars..................  $1.594 per thousand...........    $31.88
1,000.................................  Large cigars--sale price $100/  18.063% of sale price.........     18.06
                                         thousand.
500...................................  Large cigars--sale price $236/  $42.50 per thousand...........     21.25
                                         thousand.
10,000................................  Small cigarettes..............  $17.00 per thousand...........    170.00
5,000.................................  Large cigarettes..............  $35.70 per thousand...........    178.50
199,975...............................  Cigarette papers..............  $0.0106 per 50 papers.........     42.40
1,000.................................  Cigarette tubes...............  $0.0213 per 50 tubes..........      0.43

[[Page 286]]

 
100 lbs...............................  Chewing tobacco...............  $0.17 per pound...............     17.00
200 lbs...............................  Snuff.........................  $0.51 per pound...............    102.00
100 lbs...............................  Pipe tobacco..................  $0.9567 per pound.............     95.67
300 lbs...............................  Roll-your-own tobacco.........  $0.9567 per pound.............    287.01
    Total claimed.....................    ............................    ............................    964.20
----------------------------------------------------------------------------------------------------------------


                                    [Example using rates for 2002 and After]
----------------------------------------------------------------------------------------------------------------
               Quantity                             Article                       Rate of tax            Amount
----------------------------------------------------------------------------------------------------------------
20,000................................  Small cigars..................  $1.828 per thousand...........     36.56
1,000.................................  Large cigars--sale price $100/  20.719% of sale price.........     20.72
                                         thousand.
500...................................  Large cigars--sale price $236/  $48.75 per thousand...........     24.38
                                         thousand.
10,000................................  Small cigarettes..............  $19.50 per thousand...........    195.00
5,000.................................  Large cigarettes..............  $40.95 per thousand...........    204.75
199,975...............................  Cigarette papers..............  $0.0122 per 50 papers.........     48.80
1,000.................................  Cigarette tubes...............  $0.0244 per 50 tubes..........      0.49
100 lbs...............................  Chewing tobacco...............  $0.195 per pound..............     19.50
200 lbs...............................  Snuff.........................  $0.585 per pound..............    117.00
100 lbs...............................  Pipe tobacco..................  $1.0969 per pound.............    109.69
300 lbs...............................  Roll-your-own tobacco.........  $1.0969 per pound.............    329.07
    Total claimed.....................    ............................    ............................  1,105.96
----------------------------------------------------------------------------------------------------------------


[T.D. ATF-420, 64 FR 71945, Dec. 22, 1999]



Sec. 296.76  Supporting evidence.

    The claimant must support the claim with any available evidence 
(such as inventories, statements, invoices, bills, records, stamps, and 
labels), relating to the tobacco products or cigarette papers or tubes 
on hand at the time of the disaster and claimed to have been lost, 
rendered unmarketable, or condemned as a result thereof. If the claim is 
for refund of duty, the claimant must furnish, if practicable, the 
customs entry number, date of entry, and the name of the port of entry.

[T.D. ATF-420, 64 FR 71946, Dec. 22, 1999]



296.77   Time and place of filing.

    Disaster loss claims must be filed within 6 months after the date on 
which the President makes the determination that the disaster has 
occurred. All forms, including claims for duty on imported products, 
must be filed with the appropriate ATF officer.

[T.D. ATF-420, 64 FR 71946, Dec. 22, 1999]



Sec. 296.78  Action by regional director (compliance).

    The regional director (compliance) will date stamp and examine each 
claim filed under this subpart and will determine the validity of the 
claim. The claim will then be processed by him in accordance with 
existing procedures. Claims and supporting data involving customs duties 
will be forwarded to the Commissioner of Customs with a summary 
statement by the regional director (compliance) concerning his findings. 
The Commissioner of Customs will notify the regional director 
(compliance) as to allowance under this subpart of claims for duty in 
respect of unmarketable or condemned tobacco products, and cigarette 
papers and tubes.

[T.D. 6871, 31 FR 59, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28091, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

     Destruction of Tobacco Products, and Cigarette Papers and Tubes



Sec. 296.79  Supervision.

    Before payment is made under this subpart in respect of the tax, or 
tax and duty, on tobacco products, or cigarette papers or tubes rendered 
unmarketable or condemned by a duly authorized official, such tobacco 
products, or cigarette papers or tubes shall be destroyed by suitable 
means under the supervision of an ATF officer who will be assigned for 
that purpose by the regional director (compliance), unless

[[Page 287]]

such tobacco products, or cigarette papers or tubes were previously 
destroyed under supervision satisfactory to the regional director 
(compliance).

[T.D. 6871, 31 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28091, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                                Penalties



Sec. 296.80  Penalties.

    Penalties are provided in 26 U.S.C. 7206 and 7207 for the execution 
under the penalties of perjury of any false or fraudulent statement in 
support of any claim and for the filing of any false or fraudulent 
document under this subpart. All provisions of law, including penalties, 
applicable in respect of internal revenue taxes on tobacco products, and 
cigarette papers and tubes shall, insofar as applicable and not 
inconsistent with this subpart, be applied in respect of the payments 
provided for in this subpart to the same extent as if such payments 
constituted refunds of such taxes.

[T.D. 6871, 31 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55857, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28092, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]

                        Admimistrative Provisions



Sec. 296.81  Delegations of the Director.

    The Director has general authority to take action on all matters 
under this subpart. Some of the authorities in this subpart are 
redelegated to ``appropriate ATF officers''. The title of the 
appropriate ATF officer for each section is listed in ATF Order 1130.15, 
Delegation Order--Delegation of Certain of the Director's Authorities in 
27 CFR parts 270, 275, and 296. ATF delegation orders, such as ATF Order 
1130.15, are available from the ATF Distribution Center, P.O. Box 5950, 
Springfield, Virginia 22150-5190, or from the ATF web site (http://
www.atf.treas.gov).

[T.D. ATF-420, 64 FR 71947, Dec. 22, 1999]

Subparts D-E [Reserved]



                  Subpart F--Distribution of Cigarettes

    Source: 45 FR 48612, July 21, 1980, unless otherwise noted.

                                 General



Sec. 296.141  Scope of subpart.

    The regulations in this subpart relate to the distribution of 
cigarettes in excess of 60,000 in a single transaction.



Sec. 296.142  Territorial extent.

    The provisions of the regulations in this subpart apply in the 
several States of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands.



Sec. 296.143  Meaning of terms.

    When used in this subpart, terms are defined as follows in this 
section. Words in the plural shall include the singular, and vice versa. 
Words indicating the masculine gender shall include the feminine. The 
terms ``includes'' and ``including'' do not exclude other things not 
named which are in the same general class or are otherwise within the 
scope of the term defined.
    ATF officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this subpart.
    Business premises. When used with respect to a distributor, the 
property on which the cigarettes are kept or stored. The business 
premises includes the property where the records of a distributor are 
kept.
    Common or contract carrier. A carrier holding a certificate of 
convenience and necessity, a permit for contract carrier by motor 
vehicle, or other valid operating authority under the Interstate 
Commerce Act, or under equivalent operating authority from a regulatory 
agency of the United States or of any State.
    Contraband cigarettes. Any quantity of cigarettes in excess of 
60,000, if--
    (a) The cigarettes bear no evidence of the payment of applicable 
State cigarette taxes in the State where the cigarettes are found;
    (b) The State in which the cigarettes are found requires a stamp, 
impression,

[[Page 288]]

or other indication to be placed on packages or other containers of 
cigarettes to evidence payment of cigarette taxes; and
    (c) The cigarettes are in the possession of any person other than an 
exempted person.
    Disposition. The movement of cigarettes from a person's business 
premises, wherever situated, by shipment or other means of distribution.
    Distribute. To sell, ship, issue, give, transfer, or otherwise 
dispose of.
    Distributor. Any person who distributes more than 60,000 cigarettes 
in a single transaction.
    Exempted person. Any person who is--
    (a) Holding a permit issued pursuant to Chapter 52 of the Internal 
Revenue Code of 1954 as a manufacturer of tobacco products or as an 
export warehouse proprietor;
    (b) Operating a customs bonded warehouse pursuant to section 311 or 
555 of the Tariff Act of 1930 (19 U.S.C. 1311 or 1555);
    (c) An agent of a tobacco products manufacturer, an export warehouse 
proprietor, or an operator of a customs bonded warehouse;
    (d) A common or contract carrier transporting the cigarettes 
involved under a proper bill of lading or freight bill which states the 
quantity, source, and destination of the cigarettes;
    (e) Licensed or otherwise authorized by the State, in which he 
possesses cigarettes, to account for and pay cigarette taxes imposed by 
that State; and who has complied with the accounting and payment 
requirements relating to his license or authorization with respect to 
the cigarettes involved; or
    (f) An agent of the United States, of an individual State, or of a 
political subdivision of a State and having possession of cigarettes in 
connection with the performance of official duties.
    (g) Operating within a foreign-trade zone established under 19 
U.S.C., section 81b, when the cigarettes involved have been entered into 
the zone under zone-restricted status or, in respect to foreign 
cigarettes, have been admitted into the zone but have not been entered 
in the United States.
    Person. Any individual, corporation, company, association, firm, 
partnership, society, or joint stock company.
    Regional Director (compliance). The regional official in charge of 
regulatory enforcement.
    State. A State of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, or the Virgin Islands.

                                 Records



Sec. 296.146  General requirements.

    Each distributor of cigarettes shall keep copies of invoices, bills 
of lading, or other suitable commercial records relating to each 
disposition of more than 60,000 cigarettes. Dividing a single agreement 
for the disposition of more than 60,000 cigarettes into the delivery of 
smaller components of 60,000 cigarettes or less does not exempt the 
distributor from the recordkeeping requirements of this subpart. The 
distributor shall include the information prescribed in Sec. 296.147 in 
his commercial records of disposition.



Sec. 296.147  Required information.

    (a) Distributors who are exempted persons. Each distributor who is 
an exempted person as defined in Sec. 296.143 shall show the following 
information in his commercial records.
    (1) For each disposition of more than 60,000 cigarettes to an 
exempted person; or for each disposition of more than 60,000 cigarettes 
to a person who is not an exempted person and which is delivered by the 
distributor to the recipient's place of business, the distributor shall 
show on dated records--
    (i) The full name of the purchaser (or the recipient if there is no 
purchaser);
    (ii) The street address (including city and state) to which the 
cigarettes are destined; and
    (iii) The quantity of cigarettes disposed of.
    (2) For each disposition of more than 60,000 cigarettes, other than 
the dispositions specified in paragraph (a)(1) of this section, the 
distributor shall show on dated records--
    (i) The full name of the purchaser (if any);
    (ii) The name, address (including city and state), and signature of 
the person receiving the cigarettes;

[[Page 289]]

    (iii) The street address (including city and state) to which the 
cigarettes are destined;
    (iv) The quantity of cigarettes disposed of;
    (v) The driver's license number of the individual receiving the 
cigarettes;
    (vi) The license number of the vehicle in which the cigarettes are 
removed from the distributor's business premises;
    (vii) A declaration by the individual receiving the cigarettes of 
the specific purpose of receipt (such as personal use, resale, delivery 
to another person, etc.); and
    (viii) A declaration by the person receiving the cigarettes of the 
name and address of his principal when he is acting as an agent.
    (b) Distributors who are not exempted persons. Each distributor who 
is not an exempted person as defined in Sec. 296.143 shall show on dated 
commercial records the information specified in paragraphs (a)(2) (i) 
through (viii) of this section for each disposition of more than 60,000 
cigarettes.

(Approved by the Office of Management and Budget under control number 
1512-0391)

[45 FR 48612, July 21, 1980, as amended by T.D. ATF-172, 49 FR 14943, 
Apr. 16, 1984]



Sec. 296.150  Retention of records.

    (a) General. Each distributor of cigarettes shall retain the records 
required by Secs. 296.146 and 296.147 for three years following the 
close of the year in which the records are made. The distributor shall 
keep the required records on his business premises.
    (b) Shorter retention periods. The regional director (compliance) 
may, pursuant to an application submitted by a distributor, approve a 
shorter retention period where--
    (1) The distributor requesting the shorter retention period is an 
agent of a tobacco products manufacturer;
    (2) The tobacco products manufacturer will keep the required record 
for each disposition of more than 60,000 cigarettes from the agent's 
premises for the full retention period specified in paragraph (a) of 
this section; and
    (3) The approval of a shorter retention period will not unduly 
hinder the administration of enforcement of this subpart.
    (c) Application requirements. Each distributor proposing to employ a 
shorter retention period shall submit a written application, in 
duplicate, to the regional director (compliance) of the region in which 
the distributor is located. A distributor may not employ a shorter 
retention period until approval is received from the regional director 
(compliance). Each application should indicate the duration of the 
proposed retention period and should include the information required by 
paragraph (b) of this section.

       Other Provisions Relating to the Distribution of Cigarettes



Sec. 296.153  Authority of ATF officers to enter business premises.

    Any ATF officer may enter the business premises of any distributor 
of cigarettes to inspect the records required by Secs. 296.146 through 
296.147 or to inspect any cigarettes stored on the premises--
    (a) Pursuant to duly issued search warrant or an administrative 
inspection warrant; or
    (b) Upon the consent of the distributor to enter his premises.

                        Penalties and Forfeitures



Sec. 296.154  Penalties.

    (a) Any person who knowingly ships, transports, receives, possesses, 
sells, distributes, or purchases contraband cigarettes shall be fined 
not more than $100,000 or imprisoned not more than five years, or both.
    (b) Any person who knowingly violates any regulation contained in 
this subpart or makes any false statement or misrepresentation with 
respect to the information required to be recorded by this subpart shall 
be fined not more than $5,000 or imprisoned not more than three years, 
or both.



Sec. 296.155  Forfeitures.

    (a) Any contraband cigarettes involved in any violation of the 
provisions of 18 U.S.C. chapter 114 shall be subject to seizure and 
forfeiture. All provisions of the Internal Revenue Code of 1954 (title 
26 U.S.C.) relating to the seizure, forfeiture, and disposition of 
firearms, as defined in section

[[Page 290]]

5845(a) of that Code, shall, so far as applicable, extend to seizures 
and forfeitures of contraband cigarettes under the provisions of 18 
U.S.C. chapter 114.
    (b) Any vessel, vehicle or aircraft used to transport, carry, 
convey, or conceal or possess any contraband cigarettes with respect to 
which there has been committed any violation of any provision of 18 
U.S.C. chapter 114 or the regulations in this subpart shall be subject 
to seizure and forfeiture under the Customs laws, as provided by the Act 
of August 9, 1939 (49 U.S.C. 781-788).

(18 U.S.C. 2344; 53 Stat. 1291 (49 U.S.C. 782))



                 Subpart G--Dealers in Tobacco Products

    Source: T.D. 6573, 26 FR 8202, Aug. 31, 1961, unless otherwise 
noted. Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 296.161  Scope of subpart.

    The regulations in this subpart relate to the purchase, receipt, 
possession, offering for sale, or sale or other disposition of tobacco 
products by dealers in such products.

[T.D. 6871, 81 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28092, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 296.162  Territorial extent.

    The provisions of the regulations in this subpart shall apply in the 
several States of the United States and the District of Columbia.



Sec. 296.163  Meaning of terms.

    When used in this subpart, where not otherwise distinctly expressed 
or manifestly incompatible with the intent thereof, each of the 
following terms shall have the meaning ascribed in this section. Words 
in the plural form shall include the singular, words in the singular 
form shall include the plural, and words importing the masculine gender 
shall include the feminine. The terms ``includes'' and ``including'' do 
not exclude things not enumerated which are in the same general class.
    ATF officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this subpart.
    Dealer. Any person who sells, or offers for sale, at wholesale or 
retail levels, any cigars or cigarettes after removal.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Package. The container in which tobacco products are put up by the 
manufacturer or the importer and offered for delivery to the consumer.
    Person. An individual, partnership, association, company, 
corporation, estate, or trust.
    Removal or remove. The removal of tobacco products from the factory 
or release from Customs custody, including the smuggling or other 
unlawful importation of such articles into the United States.
    Tobacco Products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    U.S.C. The United States Code.

[T.D. 6573, 26 FR 8202, Aug. 31, 1961, as amended by T.D. 6871, 31 FR 
60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 296.163, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.



Sec. 296.164  Authority of ATF officers to enter premises.

    Any ATF officer may enter in the daytime any premises where tobacco 
products are kept or stored, so far as it may be necessary for the 
purpose of examining such products. When such premises are open at 
night, any ATF officer may enter them, while so open, in the performance 
of his official duties. The owner of such premises, or person having the 
superintendence of the same, who refuses to admit any ATF officer or 
permit him to examine such products shall be liable to the penalties 
prescribed by law for the offense. Operators of vending machines

[[Page 291]]

shall make the tobacco products in their machines available for 
inspection upon the request of any ATF officer.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28092, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 296.165  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this subpart, or endeavors to 
intimidate or impede any ATF officer acting in his official capacity, or 
forcibly rescues or attempts to rescue or causes to be rescued any 
property, after it has been duly seized for forfeiture to the United 
States in connection with a violation of the internal revenue laws, 
shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)



Sec. 296.166  Dealing in tobacco products.

    All tobacco products purchased, received, possessed, offered for 
sale, sold or otherwise disposed of, by any dealer must be in proper 
packages which bear the mark and notice as prescribed in parts 270 and 
275 of this chapter. Tobacco products may be sold, or offered for sale, 
at retail from such packages, provided the products remain in the 
packages until removed by the customer or in the presence of the 
customer. Where a vending machine is used, tobacco products must 
similarly be vended in proper packages or directly from such packages.

(72 Stat. 1424; 26 U.S.C. 5751)

[T.D. 6871, 31 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28092, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 296.167  Liability to tax.

    Any dealer who, with intent to defraud the United States, possesses 
tobacco products (a) upon which the tax has not been paid or determined 
in the manner and at the time prescribed in parts 270 and 275 of this 
chapter or (b) which, after removal without payment of tax pursuant to 
section 5704, I.R.C., and regulations issued thereunder, have been 
diverted from the applicable purpose or use specified in that section or 
(c) which are not put up in packages prescribed in parts 270 and 275 of 
this chapter or are put up in packages not bearing the marks and notices 
prescribed in such regulations shall be liable for a tax equal to the 
tax on such products.

(72 Stat. 1424; 26 U.S.C. 5751)

[T.D. 6871, 31 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28092, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 296.168  Liability to penalties and forfeitures.

    Any dealer who fails to comply with the provisions of this subpart 
becomes liable to the civil and criminal penalties, and forfeitures, 
provided by law.

(72 Stat. 1425, 1426; 26 U.S.C. 5761, 5762, and 5763)

Subpart H [Reserved]



 Subpart I--Floor Stocks Tax on Cigarettes Held for Sale on January 1, 
                       2000 and on January 1, 2002

    Authority: Section 9302, Pub.L. 105-33, 111 Stat. 251, unless 
otherwise noted.

    Source:  T.D. ATF-423, 64 FR 71958, Dec. 22, 1999, unless otherwise 
noted.

                                 General



Sec. 296.191  Purpose of this subpart.

    The regulations in this subpart implement the floor stocks tax on 
cigarettes held for sale the first moment on January 1, 2000 and on 
January 1, 2002.



Sec. 296.192  Terms used in this subpart.

    (a) Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this subpart by ATF 
Order 1130.14, Delegation Order--Delegation of the Director's 
Authorities in Subpart I of 27 CFR Part 296.
    (b) Controlled group. Pursuant to 26 U.S.C. 5061(e)(3), the term 
``controlled group'' means a controlled group of

[[Page 292]]

corporations, as defined in 26 U.S.C. 1563, and implementing regulations 
in 26 CFR 1.1563-1 through 1.1563-4, except that the words ``at least 80 
percent'' shall be replaced by the words ``more than 50 percent'' in 
each place they appear in subsection (a) of 26 U.S.C. 1563, as well as 
in the implementing regulations. Controlled groups of corporations 
include, but are not limited to:
    (1) Parent-subsidiary controlled groups as defined in 26 CFR 1.1563-
1 (a)(2).
    (2) Brother-sister controlled groups as defined in 26 CFR 1.1563-
1(a)(3).
    (3) Combined groups as defined in 26 CFR 1.1563-1(a)(4). Also, the 
rules for a controlled group of corporations apply in a similar fashion 
to groups which include partnerships and/or sole proprietorships. If one 
entity maintains more than 50% control over a group consisting of 
corporations and one, or more, partnerships and/or sole proprietorships, 
all are members of a controlled group.
    (c) Foreign trade zone. A foreign trade zone established and 
operated pursuant to the Act of June 18, 1934, as amended, 19 U.S.C. 
81a.
    (d) Large cigarettes. Cigarettes weighing more than three pounds per 
thousand.
    (e) Person. When the term ``person'' is used in this subpart, it 
refers to an individual, partnership, association, company, corporation, 
a trust, or an estate. It also includes any State or political 
subdivision.
    (f) Small cigarettes. Cigarettes weighing not more than three pounds 
per thousand.
    (g) Tax increase dates. For the purposes of this floor stocks tax, 
the tax increase dates are January 1, 2000 and January 1, 2002.



Sec. 296.193  Floor stocks tax defined.

    Floor stocks tax is a tax imposed on all Federally taxpaid or tax 
determined cigarettes held for sale on the first moment a tax increase 
becomes effective. The tax is the difference between the previous excise 
tax rate and the new tax rate.



Sec. 296.194  Persons liable for this tax.

    You are liable for this tax if you hold for sale any taxpaid or 
taxdetermined cigarettes at the moment a tax increase is effective. You 
are liable for floor stocks tax on cigarettes that you own that may be 
in transit (refer to Secs. 296.207 and 296.208). You may also be liable 
if you hold cigarettes in a foreign trade zone (refer to Sec. 296.209).



Sec. 296.195  Persons not liable for this tax.

    If you do not hold any taxpaid or taxdetermined cigarettes for sale 
at the moment a tax increase is effective, you are not liable for this 
tax.



Sec. 296.196  Floor stocks requirements.

    (a) Take an inventory. Establish the quantity of cigarettes subject 
to the floor stocks tax held for sale at the beginning of the tax 
increase dates (January 1, 2000 and January 1, 2002). You may take a 
physical inventory or you may use a book or record inventory, as 
specified in Secs. 296.205 and 296.206.
    (b) Compute tax amount. Compute the amount of tax for the cigarettes 
held for sale at the start of each of the tax increase dates. Refer to 
the table shown in Sec. 296.222. Apply the tax credit as provided by 
Sec. 296.223.
    (c) File tax return. After you have computed the floor stocks tax, 
you must file a return for each tax increase date if tax is due.
    (d) Maintain records. Maintain all records used to determine the 
quantity of cigarettes on hand at the start of each tax increase date. 
You must also maintain all computations used to determine the amount of 
tax owed. Refer to Sec. 296.241.


(Approved by the Office of Management and Budget under control number 
1512-0554)

                               Inventories



Sec. 296.201  Establish quantities of cigarettes.

    You must take an inventory to establish the quantity of cigarettes 
subject to the floor stocks tax. You may take a physical inventory or a 
book or record inventory.



Sec. 296.202  Inventory for cigarettes with export markings.

    Your inventory of cigarettes must count separately cigarettes that 
have

[[Page 293]]

been labeled for export from the United States.



Sec. 296.203  How to identify cigarettes with export markings.

    Each package (the container in which cigarettes are put up by the 
manufacturer and delivered to the consumer) of cigarettes will have:
    (a) A mark or a label with the words ``Tax-exempt. For use outside 
U.S.'' or ``U.S. Tax Exempt. For use outside U.S.''; or
    (b) A stamp, sticker, or notice, required by a foreign country or 
possession of the United States, which identifies such country or 
possession.



Sec. 296.204  When to take inventory.

    You must take your physical inventory or book or record inventory 
during the periods noted in the table to this section.

------------------------------------------------------------------------
  Date of floor stocks tax      Not earlier than        No later than
------------------------------------------------------------------------
January 1, 2000.............  December 26, 1999...  January 10, 2000.
January 1, 2002.............  December 26, 2001...  January 10, 2002.
------------------------------------------------------------------------



Sec. 296.205  Physical inventory requirements.

    Your physical inventory must include a written record of:
    (a) Quantity and Type. You must record the quantity and type of 
cigarettes in sufficient detail to determine the tax rate as stated in 
Sec. 296.222 and whether the cigarettes have export markings as stated 
in Sec. 296.203. The following chart provides the type of cigarette and 
method to use to determine quantities:

------------------------------------------------------------------------
         Type or kind                       Inventory method
------------------------------------------------------------------------
Small cigarettes (Class A)...  Count the:
                                 Number of cigarettes without
                                export markings.
                                 Number of cigarettes with
                                export markings.
Large cigarettes (Class B)...  Count the:
                                 Number of large cigarettes 6.5"
                                or less in length without export
                                markings.
                                 Number of large cigarettes 6.5"
                                or less in length with export markings.
                                 Number of each size of large
                                cigarettes more than 6.5" in length
                                without export markings.
                                 Number of each size of large
                                cigarettes more than 6.5" in length with
                                export markings.
------------------------------------------------------------------------

    (b) Date. Date(s) the inventory was taken.
    (c) Name. Name of individual(s) conducting the inventory and the 
name of the person for whom the inventory was taken.
    (d) Location. Record where the inventory was taken (street address, 
city and State).
    (e) Time. The physical inventory must be taken between the dates 
shown in Sec. 296.204. If you do not take the physical inventory as of 
the close of business on the last respective business days of 1999 and 
2001, the records must be reconciled. The inventory records must be 
reconciled to reflect the actual quantity of cigarettes held as of the 
first moment of January 1, 2000 and January 1, 2002, respectively. These 
records must include all supporting records of receipt and disposition.



Sec. 296.206  Book or record inventory requirements.

    You may use a book or record inventory if you have source records 
that show:
    (a) The quantity of receipts and dispositions of all cigarettes.
    (b) The actual type and quantities of cigarettes on hand as if a 
physical inventory had taken place the moment the tax increase became 
effective. Refer to Sec. 296.205(a).
    (c) The name and address of the consignor and consignee.
    (d) The date of receipt or disposition of the cigarettes.
    (e) The brand name of each product.

[[Page 294]]

    (f) If you do not take the inventory as of the close of business on 
the last respective business days of 1999 and 2001, the records must be 
reconciled as described in Sec. 296.205(e).



Sec. 296.207  Cigarettes in transit.

    Cigarettes in transit must be included in your inventory if you hold 
title to the cigarettes. If you have transferred the title, you must 
document the title transfer in writing. For example, you may mark the 
bill of lading with a written statement that indicates the time and 
place of the title transfer.



Sec. 296.208  Guidelines to determine title of cigarettes in transit.

    You may use the following guidelines to establish who holds title to 
cigarettes in transit.
    (a) If State law mandates the change in title, then no agreement or 
contract between seller and buyer can alter it.
    (b) In the absence of State law governing the change of title 
between seller and buyer, the Uniform Commercial Code allows the seller 
and buyer to agree when title passes.
    (c) If there is no State law or agreement between the seller and 
buyer, the Uniform Commercial Code states that title transfer depends on 
how the seller ships the cigarettes.
    (1) Freight on board (F.O.B.) destination. The title transfer occurs 
when the seller completes the performance of the physical delivery of 
the cigarettes.
    (2) Freight on board (F.O.B.) shipping point. The title transfer 
occurs when the seller transfers the title at the time and place of 
shipment, which is generally by common carrier.



Sec. 296.209  Cigarettes in a foreign trade zone.

    You are liable for the tax and must take an inventory when either of 
the following conditions apply:
    (a) Internal revenue taxes have been determined or Customs duties 
liquidated, with respect to cigarettes pursuant to the first proviso of 
section 3(a) of the Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a), 
or
    (b) Cigarettes are held by a Customs officer pursuant to the second 
proviso of section 3(a) of the Act of June 18, 1934 (48 Stat. 998, 19 
U.S.C. 81a).



Sec. 296.210  Cigarettes held in bond.

    If you are a manufacturer or an export warehouse proprietor and hold 
cigarettes in ATF bond on the tax increase dates, the floor stocks tax 
does not apply to those cigarettes. Likewise, if you have cigarettes 
held in a Customs bonded warehouse, the floor stocks tax does not apply 
on those cigarettes.



Sec. 296.211  Unmerchantable cigarettes.

    Any cigarettes that you hold for return to a supplier because of 
some defect are not subject to the floor stocks tax. You must prepare a 
separate list of these items. You cannot include as unmerchantable any 
items that may be held because of poor market demand or to reduce your 
inventory.



Sec. 296.212  Cigarettes in vending machines.

    You do not have to inventory cigarettes held in a vending machine 
for retail sale, provided:
    (a) The vending machine holding the cigarettes is placed at a 
location where retail sales occur, and
    (b) The cigarettes are ready to be dispensed by a consumer.



Sec. 296.213  Cigarettes marked ``not for sale'' or ``complimentary''.

    Cigarettes marked ``not for sale'' or ``complimentary'' that are 
part of a sale (for example, buy two packs and get one pack free) are 
subject to the floor stocks tax and must be included in the book or 
record inventory as required by Secs. 296.205 and 296.206. Cigarettes 
that are marked ``not for sale'' or ``complimentary'' and are intended 
to be given away and not in conjunction with any sale are not subject to 
the floor stocks tax.

                          Compute Tax Liability



Sec. 296.221  Determine amount of tax due.

    After you have taken your inventory, apply the applicable tax rate 
for each type of cigarette using the table in Sec. 296.222. Multiply the 
amount of each

[[Page 295]]

type of cigarette by the applicable tax rate.



Sec. 296.222  Floor stocks tax rates.

------------------------------------------------------------------------
          Type or kind              January 1, 2000     January 1, 2002
------------------------------------------------------------------------
Small Cigarettes (3 pounds or     $5 per 1,000 or 10  $2.50 per 1,000 or
 less per 1,000).                  cents per 20.       5 cents per 20
Large Cigarettes (more than 3     $10.50 per 1,000    $5.25 per 1,000 or
 pounds per 1,000).                or 21 cents per     10.5 cents per 20
                                   20.
------------------------------------------------------------------------
  Special rule: For large
   cigarettes over 6\1/2\ inches
   long determine the rate for
   each length. Multiply the
   rate prescribed for small
   cigarettes by the whole
   number that represents the
   addition of each 2\3/4\
   inches and any fraction of
   the length, as one (1)
------------------------------------------------------------------------



Sec. 296.223  Apply tax credit.

    You are allowed a credit against your floor stocks tax of up to 
$500. However, controlled groups are eligible for only one credit for 
the entire group. The credit may be divided equally among the members or 
apportioned in any other manner agreeable to the members.

                           Filing Requirements



Sec. 296.231  How to obtain a tax return.

    You may obtain ATF Form 5000.28T, Floor Stocks Tax Return for 
Cigarettes, from any of the following sources:
    (a) ATF web site (www.atf.treas.gov);
    (b) ATF Distribution Center, PO Box 5950, Springfield, Virginia 
22150-5950, telephone (703) 455-7801; or
    (c) National Revenue Center, 550 Main Street, Cincinnati, Ohio 
45202-3263, telephone (800) 398-2282 or (513) 684-7151.



Sec. 296.232  Prepare tax return.

    If your tax liability is zero, you do not have to complete or file a 
tax return. Otherwise, complete and file the floor stocks tax return in 
accordance with the instructions for the form.



Sec. 296.233  How to pay.

    Your payment must be in the form of a check or money order and sent 
with ATF Form 5000.28T unless you are required to file by electronic 
fund transfer as described in paragraph (a) of this section.
    (a) Electronic fund transfer. If you pay any other excise taxes 
collected by ATF by electronic fund transfer, then you must also send 
your payment for this floor stocks tax by an electronic fund transfer. 
ATF P 5000.10, Payment by Electronic Funds Transfer, specifies how to 
make an electronic fund transfer. You can get ATF P 5000.10 from any of 
the following sources:
    (1) ATF web site (www.atf.treas.gov);
    (2) ATF Distribution Center, P.O. Box 5950, Springfield, Virginia 
22150-5950, telephone (703) 455-7801; or
    (3) National Revenue Center, 550 Main Street, Cincinnati, Ohio 
45202-3263, telephone (800) 398-2282 or (513) 684-7151.
    (b) [Reserved]



Sec. 296.234  Tax return due dates.

------------------------------------------------------------------------
           Tax increase date              File tax return no later than:
------------------------------------------------------------------------
January 1, 2000........................  March 31, 2000 \1\
January 1, 2002........................  April 1, 2002
------------------------------------------------------------------------
\1\ Section 9302(j) of P.L. 105-33 states that the due date is April 1,
  2000. However, section 5703(b)(2)(E) of the Internal Revenue Code
  requires that when a due date falls on a Saturday, Sunday or a legal
  holiday, the preceding day that is not a Saturday, Sunday or legal
  holiday will be the due date. Therefore, the floor stocks tax for this
  period is due on March 31, 2000 since April 1, 2000, falls on a
  Saturday.



Sec. 296.235  Filing requirements for multiple locations.

    You may file a consolidated return if all locations or places of 
business have the same employer identification number. You also have the 
option of filing a separate return for each place of business or 
location.



Sec. 296.236  Cigarettes in a warehouse.

    (a) Cigarettes warehoused at one or more locations must be reported 
on the tax return representing the location where the cigarettes will be 
offered for sale.
    (b) Cigarettes offered for sale at several locations must be 
reported on a tax return filed by one or more of the

[[Page 296]]

locations. The cigarettes can be reported by a single location or 
apportioned among several locations.



Sec. 296.237  Controlled group members.

    If you are a member of a controlled group, you must file if the 
combined liability with other members is more than $500. If you have 
your own employer identification number, you must file a separate tax 
return. You may take the tax credit discussed in Sec. 296.223 if it is 
apportioned to you as a member of the controlled group.

                                 Records



Sec. 296.241  Required records.

    You must maintain:
    (a) Inventory records.
    (b) Tax computations.
    (c) Names, addresses and employer identification number of all 
controlled group members, if applicable.
    (d) Copy of tax return, if you filed one.
    (e) List of locations and warehouses covered by the tax return.
    (f) Any approved alternate method or procedure under 296.263.



Sec. 296.242  Period for maintaining records.

    An appropriate ATF officer may require, in writing, that you keep 
records and any tax returns for an additional period of not more than 3 
years. Keep your records in accordance with time frames shown in the 
table to this section.

------------------------------------------------------------------------
                                           Maintain your records for at
              If you have:                            least:
------------------------------------------------------------------------
Taken an inventory but are not required  3 years from the tax increase
 to file a tax return.                    date.
Filed a tax return on or before the due  3 years from the due date of
 date of the return.                      the tax return, as specified
                                          in Sec.  296.234.
Filed a tax return after the due date    3 years from the date of filing
 of the tax return.                       the tax return.
------------------------------------------------------------------------



Sec. 296.243  Cigarettes at multiple locations.

    You must maintain a list of each place where you hold cigarettes 
subject to the floor stocks tax. This list must include:
    (a) Address.
    (b) Name of the proprietor (if different).
    (c) The employer identification number (if different).
    (d) Quantity and classification of all cigarettes held at each 
location.



Sec. 296.244  Where records must be maintained.

    Keep your inventory records at your principal place of business. All 
records must be made available to an appropriate ATF officer upon 
demand.



Sec. 296.245  Errors in records.

    If your inventory records or tax computation records contain an 
error that resulted in an overpayment of tax, you can file a claim for 
refund. If your inventory or tax computation records contain an error 
that resulted in an underpayment of tax, you must file an additional tax 
return on which you show and pay the additional tax, interest and any 
applicable penalties.

                                 Claims



Sec. 296.251  Before filing a claim.

    Before you can file a claim for refund, you must have paid your 
floor stocks tax on ATF F 5200.28T and subsequently determined that you 
overpaid the tax.



Sec. 296.252  When to file a claim for errors on return.

    You must file the claim within 3 years from the due date of filing 
the tax return or 2 years from the time the tax was paid, whichever is 
later.



Sec. 296.253  How to file a claim for errors on return.

    Your claim must be filed on ATF Form 2635 (5620.8). The claim must 
include detailed and sufficient evidence to support why you believe the 
tax was overpaid. The claim and supporting

[[Page 297]]

documentation must be mailed or delivered to the address shown on the 
form.


(Approved by the Office of Management and Budget under control number 
1512-0554)



Sec. 296.254  Destruction of cigarettes by a Presidentially-declared major disaster.

    After you have paid the floor stocks tax, you may file a claim for 
refund of tax on cigarettes lost, rendered unmarketable, or condemned 
because of a Presidentially-declared major disaster. Refer to subpart C 
of this part for the time, evidence and procedures for filing a claim.



Sec. 296.255  Additional reasons for filing a claim.

    (a) Manufacturer. 27 CFR part 270, subparts I and K state the times, 
reasons and procedures for filing a claim for refund.
    (b) Export warehouse proprietor. 27 CFR part 290, subpart G, states 
the time, evidence and procedures for filing a claim for refund.
    (c) Exported taxpaid. If cigarettes are shipped from the United 
States, you may file a claim for drawback of taxes under subpart K of 27 
CFR part 290.
    (d) Importer. An importer may follow the procedures for filing a 
claim as described in 27 CFR part 275, subpart I.

                     Alternate Methods or Procedures



Sec. 296.261  Purpose of an alternate method or procedure.

    An alternate method or procedure is a different way of performing a 
requirement than is provided in this subpart of regulations. You would 
only make a request if you wanted to perform a requirement in a 
different way than is provided in this subpart.



Sec. 296.262  How to apply for approval.

    You must apply in writing to the National Revenue Center, 550 Main 
Street, Cincinnati, Ohio 45202-3263. You must describe the alternate 
method or procedure and reasons you wish to use it. You cannot use the 
alternate method until you receive written approval from ATF.


(Approved by the Office of Management and Budget under control number 
1512-0554)



Sec. 296.263  Conditions for approval.

    The alternate method or procedure may be approved if it meets all of 
the following conditions:
    (a) There is good cause for its use.
    (b) It is consistent with the purpose and effect intended by the 
prescribed method or procedure.
    (c) It affords equivalent security to the revenue.
    (d) It is not contrary to any provision of law.
    (e) It will not result in an increase in cost to the Government.
    (f) It will not hinder the effective administration of this subpart 
such as delaying timely payment of taxes.
    (g) It is not a method or procedure that relates to the payment or 
collection of tax.



Sec. 296.264  Withdrawal of an alternate method or procedure.

    The approval will be withdrawn if revenue is jeopardized or 
administration of this subpart is hindered. ATF will give you a written 
notice of the withdrawal.

                             ATF Authorities



Sec. 296.270  Delegations of the Director.

    The regulatory authorities of the Director contained in this subpart 
are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF O 1130.14, Delegation Order--Delegation of the 
Director's Authorities in Subpart I of 27 CFR part 296. ATF delegation 
orders, such as ATF O 1130.14, are available to any interested party by 
mailing a request to the ATF Distribution Center, PO Box 5950, 
Springfield, VA 22150-5190, or by accessing the ATF web site (http://
www.atf.treas.gov/).



Sec. 296.271  Entry, examination and testimony.

    Appropriate ATF officers, in performing official duties, may enter 
any premises to examine cigarettes subject to floor stocks tax. They may 
enter the premises during the day or may also

[[Page 298]]

enter at night if the premises are open. Appropriate ATF officers may 
audit and examine all cigarettes, inventory records, books, papers, or 
other resource data for the purpose of ascertaining, determining or 
collecting floor stocks tax. They may take testimony (under oath) of any 
person when inquiring as to proper payment of floor stocks taxes.



Sec. 296.272  Issuance of summons.

    Appropriate ATF officers can issue summonses when there is no 
Justice Department referral under the authority stated in 27 CFR 70.22. 
The summons will state a place and time for such items or person to 
appear. ATF will issue a summons to require:
    (a) Any books of account or other data pertaining to liability of 
floor stocks tax.
    (b) Any person liable for the floor stocks tax or having possession 
of books of account or other data.
    (c) Any other appropriate person in connection with the books or tax 
liability.



Sec. 296.273  Refusing entry or examination.

    If you or another person in charge of the premises refuses to admit 
any appropriate ATF officer or prevents any appropriate ATF officer from 
examining the records or cigarettes, you may be liable for the penalties 
described in 26 U.S.C. 7342 and 7212, respectively.



Sec. 296.274  Penalties for failure to comply.

    If you fail to follow these regulations, ATF may apply applicable 
civil and criminal penalties under the Internal Revenue Code of 1986. 
For example, failure to file and failure to pay penalties may be 
assessed against you if you do not timely file your tax return or timely 
pay the taxes due. In addition, interest under 26 U.S.C. 6621 accrues 
for any underpayment of tax and on all assessed penalties until paid.


[[Page 299]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Material Approved for Incorporation by Reference
  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 301]]

            Material Approved for Incorporation by Reference

                      (Revised as of April 1, 2001)

  The Director of the Federal Register has approved under 5 U.S.C. 
552(a) and 1 CFR Part 51 the incorporation by reference of the following 
publications. This list contains only those incorporations by reference 
effective as of the revision date of this volume. Incorporations by 
reference found within a regulation are effective upon the effective 
date of that regulation. For more information on incorporation by 
reference, see the preliminary pages of this volume.


27 CFR (PARTS 200 TO END)

BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, DEPARTMENT OF THE TREASURY
                                                                  27 CFR


American Society of Brewing Chemists

  3340 Pilot Rd., St. Paul, MN 55121
Methods of Analysis of the American Society of                   245.135
  Brewing Chemists, 7th Ed., 1976.



[[Page 303]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2001)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                          Title 2--[Reserved]

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  General Accounting Office (Parts 1--99)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
       VII  Advisory Commission on Intergovernmental Relations 
                (Parts 1700--1799)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)
     XXIII  Department of Energy (Part 3301)
      XXIV  Federal Energy Regulatory Commission (Part 3401)

[[Page 304]]

       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)
    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
    LXXIII  Department of Agriculture (Part 8301)
     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)
    LXXVII  Office of Management and Budget (Part 8701)

                          Title 6--[Reserved]

              

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture

[[Page 305]]

         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
      XIII  Northeast Dairy Compact Commission (Parts 1300--1399)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy, Department of Agriculture (Parts 
                2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)

[[Page 306]]

    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Immigration and Naturalization Service, Department of 
                Justice (Parts 1--599)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Part 1800)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)

[[Page 307]]

        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)

[[Page 308]]

        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Export Administration, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  United States Customs Service, Department of the 
                Treasury (Parts 1--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)

[[Page 309]]

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board Regulations (Parts 
                900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Board for International Broadcasting (Parts 1300--
                1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

[[Page 310]]

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--999)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

[[Page 311]]

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--799)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Bureau of Alcohol, Tobacco and Firearms, Department of 
                the Treasury (Parts 1--299)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--199)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)

[[Page 312]]

        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Pension and Welfare Benefits Administration, 
                Department of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
        VI  Bureau of Mines, Department of the Interior (Parts 
                600--699)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)

[[Page 313]]

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799)
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

[[Page 314]]

                        Title 35--Panama Canal

         I  Panama Canal Regulations (Parts 1--299)

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Part 1501)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--799)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)

[[Page 315]]

       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans 
                Employment and Training, Department of Labor 
                (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300.99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-70)
       304  Payment from a Non-Federal Source for Travel Expenses 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Health Care Financing Administration, Department of 
                Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

[[Page 316]]

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10005)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)

[[Page 317]]

     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Transportation (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Department of Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)

[[Page 318]]

        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  Panama Canal Commission (Parts 3500--3599)
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        54  Defense Logistics Agency, Department of Defense (Part 
                5452)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Research and Special Programs Administration, 
                Department of Transportation (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Transportation (Parts 400--
                499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)

[[Page 319]]

        XI  Bureau of Transportation Statistics, Department of 
                Transportation (Parts 1400--1499)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR



[[Page 321]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2001)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Commission on Intergovernmental          5, VII
     Relations
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Alcohol, Tobacco and Firearms, Bureau of          27, I
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
   Compliance Board
[[Page 322]]

Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Board for International Broadcasting              22, XIII
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Export Administration, Bureau of                15, VII
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Corporation for National and Community Service    45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Customs Service, United States                    19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51

[[Page 323]]

  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 2
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   5, LIV; 40, I, IV, VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                25, III, LXXVII; 48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export Administration, Bureau of                  15, VII
Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1

[[Page 324]]

Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Accounting Office                         4, I
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
     of Certain Employees
[[Page 325]]

  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Health Care Financing Administration            42, IV
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Health Care Financing Administration              42, IV
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Naturalization Service            8, I
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Intergovernmental Relations, Advisory Commission  5, VII
     on
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II

[[Page 326]]

  Minerals Management Service                     30, II
  Mines, Bureau of                                30, VI
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I; 40, IV
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration and Naturalization Service          8, I
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Pension and Welfare Benefits Administration     29, XXV
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training, Office of    41, 61; 20, IX
       the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
Management and Budget, Office of                  5, III, LXXVII; 48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II
Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Mines, Bureau of                                  30, VI

[[Page 327]]

Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Dairy Compact Commission                7, XIII
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Panama Canal Commission                           48, 35
Panama Canal Regulations                          35, I
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension and Welfare Benefits Administration       29, XXV
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII

[[Page 328]]

  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Special Programs Administration      49, I
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V

[[Page 329]]

  Research and Special Programs Administration    49, I
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Statistics Brureau                 49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol, Tobacco and Firearms, Bureau of        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs Service, United States                  19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training, Office of the  41, 61; 20, IX
     Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 331]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations which were 
made by documents published in the Federal Register since January 1, 
1986, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 1986, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, and 1973-1985'' published in seven 
separate volumes.

                                  1986

27 CFR
                                                                   51 FR
                                                                    Page
Chapter I
200  Authority citation revised....................................45762
200.5  Amended.....................................................45762
200.36  Revised....................................................45762
200.37  Amended....................................................45763
200.55  Revised....................................................45763
200.56  (a) and (b) amended........................................45763
200.57  Revised....................................................45763
200.60  Revised....................................................45763
200.63  Added......................................................45763
200.64  Revised....................................................45763
200.65  Revised....................................................45763
200.71  Revised....................................................45763
200.72  Revised....................................................45764
200.73  Revised....................................................45764
200.77  Revised....................................................45764
200.79  Revised....................................................45764
200.107a  Added....................................................45764
200.108  Existing text designated as (a); (b) added................45764
200.110  Revised...................................................45764
200.115  Revised...................................................45764
200.118  Revised...................................................45764
200.119  Removed...................................................45764
200.126  Amended...................................................45764
240  Nomenclature change...........................................13216
    Authority citation revised.....................................39525
240.142  Heading amended...........................................13216
240.143  Nomenclature change.......................................13217
240.167  Heading amended...........................................13216
240.169  Heading amended...........................................13216
    Nomenclature change............................................13217
240.208  Nomenclature change.......................................13217
240.321  Nomenclature change.......................................13217
240.580  Amended...................................................39526
240.820--240.841 (Subpart PP)  Heading revised.....................13216
240.820  Citation revised..........................................13216
240.822  Revised...................................................13216
240.823--240.828  Undesignated center heading revised..............13217
240.823  Nomenclature change.......................................13217
240.828  Heading amended...........................................13216
    Nomenclature change............................................13217
240.830--240.832  Undesignated center heading revised..............13217
240.830  Heading amended...........................................13216
    Nomenclature change............................................13217
240.831  Heading amended...........................................13216
    Nomenclature change............................................13217
240.832  Heading amended...........................................13216
    Nomenclature change............................................13217
240.836--240.839  Undesignated center heading revised..............13217
240.839  Nomenclature change.......................................13217
240.840--240.841  Undesignated center heading revised..............13217
240.850--240.859 (Subpart QQ)  Heading revised.....................13216
240.854  Heading amended...........................................13216
240 (Subpart RR)  Heading revised..................................13216
240.880--240.881 (Subpart SS)  Heading revised.....................13216
240.880  Nomenclature change.......................................13217
240.904  Nomenclature change.......................................13217
240.904a  Heading amended..........................................13216
    Nomenclature change............................................13217
245  Authority citation corrected....................................598
    Removed; eff. 5-1-86............................................7763
245.117g  Correctly designated.......................................598

[[Page 332]]

250  Authority citation revised....................................39526
250.31  Revised....................................................28078
250.314  Nomenclature change.......................................39526
251  Authority citation revised....................................39526
251.58  Amended....................................................39526
251.59  Amended....................................................39526
251.204  Nomenclature change.......................................39526
252  Authority citation revised; eff. 5-1-86........................7698
252.3  Revised; eff. 5-1-86.........................................7698
252.11  Amended; eff. 5-1-86........................................7698
252.40  Heading revised; text amended; eff.5-1-86...................7698
252.41  Revised; eff. 5-1-86........................................7698
252.43  Added; eff. 5-1-86..........................................7698
252.51  Amended; eff. 5-1-86........................................7698
252.60  Revised; eff. 5-1-86........................................7698
252.141--252.148 (Subpart G)  Revised; eff. 5-1-86..................7698
252.150  Heading corrected..........................................9190
252.150a--252.150k (Subpart Ga)  Removed; regulations transferred 
        to Subpart G; eff. 5-1-86...................................7700
252.223  Amended; eff. 5-1-86.......................................7700
252.290  Amended; eff. 5-1-86.......................................7700
252.295  Undesignated center heading and section added; eff. 5-1-
        86..........................................................7700
252.320--252.321  Undesignated center heading revised; eff. 5-1-86
                                                                    7700
252.320  Revised; eff. 5-1-86.......................................7700
252.321  Revised; eff. 5-1-85.......................................7700
270  Authority citation corrected....................................598
    Heading and authority citation revised.........................28079
    Authority citation revised.....................................30485
270.1  Nomenclature change.........................................28080
    Confirmed......................................................43194
270.11  Amended....................................................28080
270.16  Revised....................................................43194
270.23  Introductory text republished; (b) revised.................30485
270.25  Added......................................................28080
    Confirmed......................................................43194
270.26  Nomenclature change........................................28080
    Confirmed......................................................43194
270.27  Nomenclature change........................................28080
    Confirmed......................................................43194
270.41  (c) amended................................................28080
    Confirmed......................................................43194
270.42  Amended....................................................28080
    Confirmed......................................................43194
270.44  Nomenclature change........................................28080
    Confirmed......................................................43194
270.61  Amended....................................................28080
    Confirmed......................................................43194
270.61a  Added.....................................................28080
    Confirmed......................................................43194
270.69  (c) amended................................................28080
    Confirmed......................................................43194
270.72  Revised....................................................28080
    Confirmed......................................................43194
270.104  Amended...................................................28081
    Confirmed......................................................43194
270.133  Revised...................................................28081
    Confirmed......................................................43194
270.161--270.171  Undesignated center heading revised..............28081
    Confirmed......................................................43194
270.161  Nomenclature change.......................................28081
    Confirmed......................................................43194
270.162  Nomenclature change; (b)(4) amended; (b)(5) redesignated 
        as (b)(6); new (b)(5) added................................28081
    Correctly revised..............................................35353
    Confirmed......................................................43194
270.165a  Nomenclature changes.....................................28081
    Confirmed......................................................43194
270.166  Nomenclature change.......................................28081
    Confirmed......................................................43194
270.167  Nomenclature change.......................................28081
    Confirmed......................................................43194
270.168  Nomenclature change.......................................28081
    Confirmed......................................................43194
270.182  Introductory text and (a) revised.........................28081
    Confirmed......................................................43194
270.183  Heading and (g)(6) amended; introductory text revised.....28081
    Confirmed......................................................43194
270.184  Nomenclature change.......................................28081
    Confirmed......................................................43194
270.186  Nomenclature change.......................................28081
    Confirmed......................................................43194
270.201  Nomenclature change.......................................28081
    Confirmed......................................................43194
270.202  Nomenclature change; OMB number...........................28081
    Confirmed......................................................43194
270.211  Nomenclature change.......................................28081
    Confirmed......................................................43194
270.212  Amended...................................................28081
    Confirmed......................................................43194
270.216  Added.....................................................28081
    Confirmed......................................................43194
270.216a  Added....................................................28082

[[Page 333]]

    Confirmed......................................................43194
270.217  Nomenclature change.......................................28082
    Confirmed......................................................43194
270.231--270.236  Undesignated center heading revised..............28082
    Confirmed......................................................43194
270.231  Revised...................................................28082
    Confirmed......................................................43194
270.232  Nomenclature change.......................................28082
    Confirmed......................................................43194
270.233  Nomenclature change.......................................28082
    Confirmed......................................................43194
270.234  Nomenclature change.......................................28082
    Confirmed......................................................43194
270.235  Nomenclature change.......................................28082
    Confirmed......................................................43194
270.236  Revised...................................................28082
    Confirmed......................................................43194
270.251--270.255  Undesignated center heading revised..............28082
    Confirmed......................................................43194
270.251  Nomenclature change.......................................28082
    Confirmed......................................................43194
270.252  Revised...................................................28082
    Confirmed......................................................43194
270.253  Nomenclature change.......................................28082
    Confirmed......................................................43194
270.254  Nomenclature change.......................................28082
    Confirmed......................................................43194
270.255  Revised...................................................28082
    Confirmed......................................................43194
270.281  Nomenclature change.......................................28083
    Confirmed......................................................43194
270.282  Nomenclature change.......................................28083
    Confirmed......................................................43194
270.283  Nomenclature change.......................................28083
    Confirmed......................................................43194
270.284  Nomenclature change.......................................28083
    Confirmed......................................................43194
270.286  Nomenclature change.......................................28083
    Confirmed......................................................43194
270.287  Nomenclature change.......................................28083
    Confirmed......................................................43194
270.301  Nomenclature change; undesignated center heading revised 
                                                                   28083
    Confirmed......................................................43194
270.311--270.313  Undesignated center heading revised..............28083
    Confirmed......................................................43194
270.311  (a) amended...............................................28083
    Confirmed......................................................43194
270.312  Nomenclature change.......................................28083
    Confirmed......................................................43194
270.313  Heading revised; nomenclature change......................28083
    Confirmed......................................................43194
270.331  Nomenclature change.......................................28083
    Confirmed......................................................43194
275  Heading and authority citation revised.................28083, 30485
275.1  Nomenclature change.........................................28084
    Confirmed......................................................43194
275.11  Amended....................................................28084
    Confirmed......................................................43194
275.21  (c) amended................................................28084
    Confirmed......................................................43194
275.23  Amended....................................................28084
    Confirmed......................................................43194
275.25  Heading and text amended...................................28084
    Confirmed......................................................43194
275.32  Introductory text republished; (b) revised.................30485
275.33  Added......................................................28084
    Confirmed......................................................43194
275.40  Nomenclature change........................................28084
    Confirmed......................................................43194
275.41  Amended....................................................28084
    Confirmed......................................................43194
275.50  Amended....................................................28084
    Confirmed......................................................43194
275.60  Amended....................................................28084
    Confirmed......................................................43194
275.62  Heading and text amended...................................28084
    Confirmed......................................................43194
275.63  Nomenclature change........................................28084
    Confirmed......................................................43194
275.71  Nomenclature change........................................28084
    Confirmed......................................................43194
275.72  Added......................................................28085
    Revised........................................................43194
275.72a  Added.....................................................28085
    Confirmed......................................................43194
275.75  Amended....................................................28085
    Confirmed......................................................43194
275.81--275.86 (Subpart F)  Heading revised........................28085
    Confirmed......................................................43194
275.81  (c)(5) added; nomenclature change..........................28085
    Confirmed......................................................43194
275.85--275.86  Undesignated center heading revised................28085
    Confirmed......................................................43194
275.85  Nomenclature change........................................28085
    Confirmed......................................................43194
275.85a  Amended...................................................28085
    Confirmed......................................................43194
275.86  Nomenclature change........................................28085
    Confirmed......................................................43194

[[Page 334]]

275.101--275.141 (Subpart G)  Heading revised......................28085
    Confirmed......................................................43194
275.101  Nomenclature changes......................................28085
    Confirmed......................................................43194
275.105--275.108  Undesignated center heading revised..............28085
    Confirmed......................................................43194
275.105  Revised...................................................28085
    Confirmed......................................................43194
275.106  Nomenclature change.......................................28085
    Confirmed......................................................43194
275.107  Nomenclature change; (d) and (e) amended; (f) added.......28085
    Confirmed......................................................43194
275.109--275.129  Undesignated center heading revised..............28085
    Confirmed......................................................43194
275.109  Nomenclature change.......................................28085
    Confirmed......................................................43194
275.110  Nomenclature change; (d) revised; (e) redesignated as 
        (f); new (e) added.........................................28085
    Confirmed......................................................43194
275.111  Nomenclature change.......................................28086
    Confirmed......................................................43194
275.112  (e) redesignated as (f); new (e) added; introductory text 
        and (d) amended............................................28086
    Confirmed......................................................43194
275.115a  Nomenclature change......................................28086
    Confirmed......................................................43194
275.116  Amended...................................................28086
    Confirmed......................................................43194
275.117  Nomenclature change; (b) and (c) amended; (d) added.......28086
    Confirmed......................................................43194
275.120  Amended...................................................28086
    Confirmed......................................................43194
275.121  Revised...................................................28086
    Confirmed......................................................43194
275.125  Amended...................................................28086
    Confirmed......................................................43194
275.135--275.141  Undesignated center heading revised..............28086
    Confirmed......................................................43194
275.135  Amended...................................................28086
    Confirmed......................................................43194
275.136  Nomenclature change.......................................28086
    Confirmed......................................................43194
275.137  Nomenclature change.......................................28086
    Confirmed......................................................43194
275.138  Amended...................................................28086
    Confirmed......................................................43194
275.139  Nomenclature change; (a) revised..........................28086
    Confirmed......................................................43194
275.140  Nomenclature change.......................................28086
    Confirmed......................................................43194
275.141  Nomenclature change.......................................28086
    Confirmed......................................................43194
275.161  Amended...................................................28085
    Confirmed......................................................43194
275.162  Amended...................................................28085
    Confirmed......................................................43194
275.163  Nomenclature change.......................................28086
    Confirmed......................................................43194
275.165  Undesignated center heading revised; section amended......28086
    Confirmed......................................................43194
275.170--275.174  Undesignated center heading revised..............28086
    Confirmed......................................................43194
275.170  Heading amended; nomenclature change......................28086
    Confirmed......................................................43194
275.171  Heading amended; nomenclature change......................28087
    Confirmed......................................................43194
275.172  Nomenclature change.......................................28087
    Confirmed......................................................43194
275.173  Nomenclature change.......................................28087
    Confirmed......................................................43194
275.174  Amended...................................................28087
    Confirmed......................................................43194
290  Heading and authority citation revised........................28087
    Confirmed......................................................43194
290.1  Heading amended; nomenclature change........................28087
    Confirmed......................................................43194
290.2  Amended.....................................................28087
    Confirmed......................................................43194
290.11  Nomenclature change; amended...............................28087
    Confirmed......................................................43194
290.61  Amended....................................................28087
    Confirmed......................................................43194
290.61a  Amended...................................................28087
    Confirmed......................................................43194
290.62  Nomenclature change........................................28088
    Confirmed......................................................43194
290.63  Nomenclature change........................................28088
    Confirmed......................................................43194
290.64  Nomenclature change........................................28088
    Confirmed......................................................43194
290.65  Nomenclature change........................................28088
    Confirmed......................................................43194
290.66  Nomenclature change........................................28088
    Confirmed......................................................43194
290.67  Amended; OMB number........................................28088

[[Page 335]]

    Confirmed......................................................43194
290.69  Amended....................................................28088
    Confirmed......................................................43194
290.70  Amended....................................................28088
    Confirmed......................................................43194
290.90  Revised....................................................28088
    Confirmed......................................................43194
290.112  Amended...................................................28088
    Confirmed......................................................43194
290.123  Amended...................................................28088
    Confirmed......................................................43194
290.142  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.143  Revised...................................................28088
    Confirmed......................................................43194
290.147  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.152  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.153  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.154  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.181--290.213 (Subpart J)  Heading revised......................28088
    Confirmed......................................................43194
290.181  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.182  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.183  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.184  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.185  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.187  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.188  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.189  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.190  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.191  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.192  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.193  Nomenclature change.......................................28088
    Confirmed......................................................43194
290.194  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.195  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.196  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.196a  Nomenclature change......................................28089
    Confirmed......................................................43194
290.197  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.198  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.200  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.201  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.202  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.203  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.204  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.205  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.206  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.207  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.207a  Nomenclature change......................................28089
    Confirmed......................................................43194
290.208  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.210  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.212  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.213  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.221  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.222  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.223  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.224  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.225  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.226  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.227  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.228  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.229  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.230  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.255  Nomenclature change.......................................28089
    Confirmed......................................................43194
290.264  Nomenclature change.......................................28089
    Confirmed......................................................43194

[[Page 336]]

295  Correctly designated............................................598
    Heading and authority citation revised.........................28089
    Confirmed......................................................43194
295.1  Heading and text amended....................................28090
    Confirmed......................................................43194
295.11  Amended....................................................28090
    Confirmed......................................................43194
295.23  Amended....................................................28090
    Confirmed......................................................43194
295.25  Heading and text amended...................................28090
    Confirmed......................................................43194
295.31  Nomenclature change........................................28090
    Confirmed......................................................43194
295.32  Nomenclature change........................................28090
    Confirmed......................................................43194
295.33  Nomenclature change........................................28090
    Confirmed......................................................43194
295.34  Nomenclature change........................................28090
    Confirmed......................................................43194
295.35  Nomenclature change........................................28090
    Confirmed......................................................43194
295.36  Revised....................................................28090
    Confirmed......................................................43194
295.37  Nomenclature change........................................28090
    Confirmed......................................................43194
295.41  Nomenclature change........................................28090
    Confirmed......................................................43194
295.42  Nomenclature change........................................28090
    Confirmed......................................................43194
295.43  Added......................................................28090
    Revised........................................................43194
295.46  Nomenclature change........................................28090
    Confirmed......................................................43194
295.51  Nomenclature change........................................28090
    Confirmed......................................................43194
296  Heading and authority citation revised........................28090
    Authority citation revised.....................................30485
    Confirmed......................................................43194
296.1--296.16 (Subpart A)  Heading revised.........................28091
    Confirmed......................................................43194
296.71--296.80 (Subpart C)  Heading revised........................28091
    Confirmed......................................................43194
296.71  Amended....................................................28091
    Confirmed......................................................43194
296.72  Amended....................................................28091
    Confirmed......................................................43194
296.73  Nomenclature change........................................28091
    Confirmed......................................................43194
296.74  Revised....................................................28091
    Confirmed......................................................43194
296.75  Heading and text amended...................................28091
    Confirmed......................................................43194
296.76  Nomenclature change........................................28091
    Confirmed......................................................43194
296.77  Amended....................................................28091
    Confirmed......................................................43194
296.78  Amended....................................................28091
    Heading revised................................................30485
    Confirmed......................................................43194
296.79  Undesignated center heading amended; section nomenclature 
        change.....................................................28091
    Confirmed......................................................43194
296.80  Amended....................................................28092
    Confirmed......................................................43194
296.161--296.168 (Subpart G)  Heading revised......................28092
    Confirmed......................................................43194
296.161  Amended...................................................28092
    Confirmed......................................................43194
296.163  Amended...................................................28092
    Confirmed......................................................43194
296.164  Amended...................................................28092
    Confirmed......................................................43194
296.166  Heading and text amended..................................28092
    Confirmed......................................................43194
296.167  Amended...................................................28092
    Confirmed......................................................43194
296.171--296.179 (Subpart H)  Removed..............................30485

                                  1987

27 CFR
                                                                   52 FR
                                                                    Page
Chapter I
240.340  Amended...................................................19337
240.343  Revised...................................................19337
240.344  Revised...................................................19337
240.345  Removed...................................................19337
240.591  (d) revised; OMB number.....................................669
    (a) amended....................................................19337
240.591a  (a)(2) revised; (f) removed................................532
    (c)(1) amended.................................................19337
    (c)(2) and (d) heading revised.................................47560
240.594  (a) amended...............................................19337
240.594c  Amended..................................................19337
240.595  Amended...................................................19337
240.596  (a) amended...............................................19337
240.807  Amended...................................................19337
250  Authority citation revised.......................5962, 46593, 47560
250.2  (c) revised..................................................5963

[[Page 337]]

250.11  Amended....................................................19338
    Amended (temporary)............................................46593
250.31  (b) corrected...............................................2222
250.35  (b) amended (temporary)....................................46593
250.37  Revised....................................................19338
250.44  Amended....................................................19338
250.51  Heading, (a) and (c) revised (temporary)...................46593
250.52  (c) amended................................................19338
250.54  Amended....................................................19338
250.61  Revised....................................................19338
250.62a  Amended...................................................19338
250.65  Amended....................................................19338
250.70  Amended....................................................19338
250.70a  Amended...................................................19338
250.71  Nomenclature change........................................19338
250.72  Nomenclature change........................................19338
250.74  Nomenclature change........................................19338
250.75  Amended....................................................19338
250.78  Amended....................................................19338
250.79  Amended....................................................19338
250.81  Amended....................................................19338
250.93  Amended....................................................19338
250.96  (b) amended; nomenclature change...........................19338
250.102  Amended...................................................19338
250.105  (b) amended; nomenclature change..........................19338
250.110  Amended...................................................19338
250.112  (e) and (f) revised; (g) removed; (h) redesignated as 
        (g); OMB number..............................................669
    (e) and (h) revised............................................19339
250.112a  (a)(1) amended; (a)(2) revised; (f) removed................532
    (c)(1) amended.................................................19339
    (c)(2) and (d) heading revised.................................47560
250.113  (a) amended...............................................19339
250.119  Amended...................................................19339
250.126  Amended...................................................19339
250.128  Revised...................................................19339
250.170--250.174 (Subpart I)  Added (temporary)....................46594
250.210  Amended...................................................19339
250.221  Heading, (a), and (c) revised (temporary).................46595
250.267  Added.......................................................532
250.306--250.310 (Subpart Ob)  Added (temporary)...................46595
251  Authority citation revised.....................................533,
5963, 19339
251.2  (c) revised..................................................5963
251.11  Amended....................................................19339
251.30  Amended; nomenclature change...............................19339
251.48a  Revised.....................................................533
252  Authority citation revised.....................................5963
252.2  (c) revised..................................................5963
270  Authority citation revised.....................................533,
669, 47560
270.44  Amended....................................................19339
270.162  Amended...................................................19339
270.165  Revised.....................................................669
    (b) amended....................................................19339
270.165a  (a)(2) revised; (f) removed................................533
    (c) amended....................................................19339
    (c)(2) and (d) heading revised.................................47560
270.166  Amended...................................................19340
270.167  (a) and (b) amended.......................................19340
270.168  Amended...................................................19340
270.281  Amended...................................................19340
270.283  Amended...................................................19340
270.286  Amended...................................................19340
270.311  (b) amended...............................................19340
270.313  Amended...................................................19340
275  Authority citation revised....................................47560
275.11  Amended....................................................19340
275.63  Revised......................................................534
275.81  (d)(1) amended...............................................669
275.85  Amended......................................................669
275.86  Amended......................................................669
275.101  (d) revised.................................................669
275.105  Amended...................................................19340
275.108  Amended...................................................19340
275.109  Amended...................................................19340
275.110  Amended...................................................19340
275.111  Introductory text amended; (a) removed; (b) through (e) 
        redesignated as (a) through (d); new (d) amended...........19340
275.112  Amended...................................................19340
275.114  Revised.....................................................669
275.114  (c) revised...............................................19340
275.114a  (a) and (c) amended......................................19340
275.115  Amended...................................................19340
275.115a  (a)(2) revised; (f) removed................................534
275.115a  (c)(1) amended...........................................19340
    (c)(2) and (d) heading revised.................................47560
275.116  Amended...................................................19340
275.118  Amended...................................................19341
275.123  Amended...................................................19341
275.125  Amended...................................................19341
275.126  Amended...................................................19341
275.127  Amended...................................................19341
275.129  Amended...................................................19341
275.135  Amended.....................................................670
275.137  Amended...................................................19341
275.161  Amended...................................................19341
275.163  Amended...................................................19341

[[Page 338]]

275.170  (b) amended...............................................19341
275.172  (b) amended...............................................19341
285  Authority citation revised.....................................5963
285.2  (c) revised..................................................5963
285.25  Revised......................................................670
    (b) amended....................................................19341
285.26  Amended....................................................19341
285.27  (a)(2) revised; (f) removed..................................534
    (c) amended....................................................19341
    (c)(2) and (d) heading revised.................................47560
285.34  Amended....................................................19341
285.171  Amended...................................................19341
285.173  Amended...................................................19341
285.193  Amended...................................................19341
290.67  (a) amended................................................19341
290.153  Amended...................................................19341
290.154  Amended...................................................19341
295.36  Amended....................................................19341
296.7  Amended.....................................................19342
296.74  Amended....................................................19342

                                  1988

27 CFR
                                                                   53 FR
                                                                    Page
Chapter I
231  Authority citation revised....................................17554
231.32--231.39 (Subpart Ca)  Added.................................17554
231.52  Removed....................................................17556
240  Authority citation revised....................................17556
240.340--240.348 (Subpart N)  Revised..............................17557
250  Authority citation revised.............................17559, 45267
250.36  (b), (c), and (d)(2) revised...............................17559
250.46  Added......................................................17559
250.47  Added......................................................17559
250.81  Revised; OMB number........................................45267
250.96  Revised; OMB number........................................45267
250.105  Revised; OMB number.......................................45268
250.110  Amended; OMB number.......................................45268
250.111  Amended; OMB number.......................................45268
250.112  Revised; OMB number.......................................45268
250.112a  (a)(3) and (c)(1) amended................................45268
250.113  (c), (d), (e) and (f) amended; OMB number.................45268
250.171  Amended...................................................17559
250.173  (c)(1) amended............................................17559
250.307  Amended...................................................17559
250.309  (c)(1) amended............................................17559
252  Authority citation revised....................................25157
252.30  Revised....................................................25157
252.122  Authority note revised....................................25157
270  Authority citation revised....................................17559
270.31--270.36 (Subpart Ca)  Added.................................17560
275  Authority citation revised....................................45269
275.105  Revised; OMB number.......................................45269
275.106  Revised; OMB number.......................................45269
275.112  Amended; OMB number.......................................45269
275.115a  (a)(3), (b)(3) and (c)(1) amended........................45269
285  Authority citation revised....................................17561
285.30b--285.30f (Subpart Ca)  Added...............................17561
290  Authority citation revised....................................17563
290.31--290.36 (Subpart Ba)  Added.................................17563

                                  1989

27 CFR
                                                                   54 FR
                                                                    Page
Chapter I
231.32  (a) amended................................................12611
231.35  Heading, (a), and authority citation revised...............12611
240.578  Revised...................................................12611
270.11  Amended....................................................48839
270.25a  Added.....................................................48839
270.61b  Added.....................................................48839
270.72  Amended....................................................48839
270.133  Amended...................................................48839
270.182  (a) revised...............................................48840
270.183  Introductory text revised.................................48840
270.216b  Added....................................................48840
270.216c  Added....................................................48840
270.231  Amended...................................................48840
270.252  Amended...................................................48840
270.255  Amended...................................................48840
275.11  Amended.............................................12190, 48840
275.30  Added......................................................48841
275.50  Amended....................................................12190
275.72b  Added.....................................................48841
275.72c  Added.....................................................48841
275.81  (c)(4)(i) amended..........................................12190
    (c)(6) added...................................................48841
275.85a  Amended...................................................12190
275.107  (e) and (f) revised; (g) and undesignated paragraph added
                                                                   48841
275.110  (e) and (f) redesignated as (f) and (g); new (e) added....48841
275.117  (c) and (d) revised; (e) and undesignated paragraph added
                                                                   48841
275.121  Amended...................................................48841
275.139  (a) revised...............................................48841
290.11  Amended....................................................48841

[[Page 339]]

290.143  Revised...................................................48841
295.11  Amended....................................................48842
295.45a  Added.....................................................48842
295.45b  Added.....................................................48842
296  Authority citation added; subpart authority citations removed
                                                                   48842
296.72  Amended....................................................48842
296.74  Revised....................................................48842
296.163  Amended...................................................48843
296.171--296.181 (Subpart H)  Added................................48843

                                  1990

27 CFR
                                                                   55 FR
                                                                    Page
Chapter I
231  Removed.......................................................24989
240  Redesignated as part 24 and revised...........................24989
250  Authority citation revised.............................18066, 52741
250.11  Amended....................................................18066
250.50a  Added.....................................................18066
250.77  Revised....................................................18066
250.79a  Added.....................................................18066
    (c) amended....................................................52741
250.98  Removed....................................................18067
250.112  (c)(3) amended............................................47658
250.165  Added.....................................................18067
250.204a  Added....................................................18067
250.205  Revised...................................................18067
250.262  Revised...................................................18068
250.262a  Added....................................................18068
    (c) amended....................................................52741
251  Authority citation revised....................................18069
    Authority citation.............................................52742
251.11  Amended....................................................18069
251.40  Revised....................................................18069
251.40a  Added.....................................................18069
    (c) amended....................................................52742
251.76  Undesignated center heading and section added..............18070
251.77  Added......................................................18070
    (d) corrected..................................................23635
252.3  Amended.....................................................25033
252.59  Amended....................................................25033
252.123  (a) amended...............................................25033
252.126  Amended...................................................25033
252.216  Amended...................................................25034
270.21  (a) revised................................................52742
270.22  Heading revised............................................52742
270.22a  Added.....................................................52742
270.23  Revised....................................................52742
270.25  Revised....................................................52742
270.25a  Revised...................................................52743
270.34  (a) amended................................................47658
270.166  Amended...................................................47658
270.168  Amended...................................................47658
270.169  Amended...................................................47658
270.183  (e) revised...............................................52743
270.184  Amended...................................................52743
270.187  Heading revised...........................................52743
270.187a  Added....................................................52743
270.202  (b) amended...............................................52743
270.203  Amended...................................................52743
270.311  (b) amended...............................................52743
275.30  Revised....................................................52743
275.31  (a) revised................................................52743
275.32  Revised....................................................52743
275.33  Revised....................................................52744
275.34  Revised....................................................52744
275.35  Revised....................................................52744
275.37  Amended....................................................52744
275.39  Heading revised............................................52744
275.39a  Added.....................................................52744
275.81  (c)(4)(ii) through (iv)....................................52744
275.110  (b) and (c) revised.......................................52744
275.115  Amended...................................................47658
275.139  (b) revised...............................................52745
275.170  (b) amended...............................................52745
275.172  (b) amended...............................................52745
275.181  (a) through (d) redesignated as (a)(1) through (4); (a) 
        introductory text and (b) added; new (a)(1) and (4) 
        amended; introductory text revised.........................52745
275.183  Heading revised...........................................52745
285.21  Revised....................................................52745
285.22  Revised....................................................52745
285.29  Amended....................................................47658
285.30d  (e)(1) amended............................................47658
290.34  (a) amended................................................47658
290.67  (b) revised................................................52745
295.51  Amended....................................................52745
296.7  Amended.....................................................47658
296.74  Amended....................................................52745
296.191--296.202 (Subpart I)  Added................................52746

                                  1991

                       (No Regulations Published)

                                  1992

27 CFR
                                                                   57 FR
                                                                    Page
Chapter I
270.11  Regulation at 54 FR 48839 confirmed........................53854

[[Page 340]]

270.25a  Regulation at 55 FR 52743 confirmed.......................53854
270.61b  Regulation at 54 FR 48839 confirmed.......................53854
270.72  Regulation at 54 FR 48839 confirmed........................53854
270.133  Regulation at 54 FR 48839 confirmed.......................53854
270.182  Regulation at 54 FR 48840 confirmed.......................53854
270.183  Regulation at 54 FR 48840 confirmed.......................53854
270.216b  Regulation at 54 FR 48840 confirmed......................53854
270.216c  Regulation at 54 FR 48840 confirmed......................53854
270.231  Regulation at 54 FR 48840 confirmed.......................53854
270.252  Regulation at 54 FR 48840 confirmed.......................53854
270.255  Regulation at 54 FR 48840 confirmed.......................53854
275.11  Regulation at 54 FR 48840 confirmed........................53854
275.30  Regulation at 55 FR 52743 confirmed........................53854
275.72b  Regulation at 54 FR 48841 confirmed.......................53854
275.72c  Regulation at 54 FR 48841 confirmed.......................53854
275.81  Regulation at 54 FR 48841 confirmed........................53854
275.107  Regulation at 54 FR 48841 confirmed.......................53854
275.110  Regulation at 54 FR 48841 confirmed.......................53854
275.117  Regulation at 54 FR 48841 confirmed.......................53854
275.121  Regulation at 54 FR 48841 confirmed.......................53854
275.139  Regulation at 54 FR 48841 confirmed.......................53854
290.11  Regulation at 54 FR 48841 confirmed........................53854
290.143  Regulation at 54 FR 48841 confirmed.......................53854
295.11  Regulation at 54 FR 48842 confirmed........................53854
295.45a  Regulation at 54 FR 48842 confirmed.......................53854
295.45b  Regulation at 54 FR 48842 confirmed.......................53854
296.72  Regulation at 54 FR 48842 confirmed........................53854
296.74  Regulation at 55 FR 52745 confirmed........................53854
296.163  Regulation at 54 FR 48843 confirmed.......................53854
296.171--296.181 (Subpart H)  Regulation at 54 FR 48843 confirmed 
                                                                   53854

                                  1993

27 CFR
                                                                   57 FR
                                                                    Page
Chapter I
252.148  Amended...................................................40358
252.219  Amended...................................................40355

                                  1994

                       (No Regulations Published)

                                  1995

27 CFR
                                                                   60 FR
                                                                    Page
Chapter I
250.112  (b) and (d) revised; (c)(1) amended.......................33674
270.163  Revised...................................................33675
270.164  Added.....................................................33675
270.165  (a) revised; (b) removed; (c) redesignated as (b).........33675
275.113  Revised...................................................33675
275.114  (b) and (d) revised.......................................33675
285.25  (c) revised; (f) amended; (g) added........................33676

                                  1996

27 CFR
                                                                   61 FR
                                                                    Page
Chapter I
200.3  (b) removed; (c) redesignated as (b); new (b) revised.......20725
200.5  Amended.....................................................29956
200.25  Amended....................................................29957
200.27  Amended....................................................29957
200.29  Amended....................................................29957
200.31  Amended....................................................29957
200.35  Amended....................................................29957
200.36  Amended....................................................29957
200.37  Amended....................................................29957
200.38  Amended....................................................29957
200.45  Amended....................................................29957
200.46  Amended....................................................29957
200.48  Amended....................................................29957
200.49  Amended....................................................29957
200.49a  Amended...................................................29957
200.49b  Amended...................................................29957
200.55  (a) amended................................................29957

[[Page 341]]

200.57  Amended....................................................29957
200.59  Amended....................................................29957
200.60  (a), (b) and (c) amended...................................29957
200.61  Amended....................................................29957
200.62  Amended....................................................29957
200.63  Amended....................................................29957
200.64  (a), (b) and (c) amended...................................29957
200.65  Amended....................................................29957
200.70  Amended....................................................29957
200.71  Amended....................................................29957
200.72  Amended....................................................29957
200.73  Amended....................................................29957
200.75  Amended....................................................29957
200.78  Amended....................................................29957
200.79  (b) amended................................................29957
200.80  Amended....................................................29957
200.85  Amended....................................................29957
200.95  Amended....................................................29957
200.105  Amended...................................................29957
200.106  Amended...................................................29957
200.107--200.110  Undesignated center heading amended..............29957
200.107  Amended...................................................29957
200.107a  Amended..................................................29957
200.108  Amended...................................................29957
200.109  Amended...................................................29957
200.110  Amended...................................................29957
200.115  Amended...................................................29957
200.116  Amended...................................................29957
200.117  Amended...................................................29957
200.126  Amended...................................................29957
200.129  Amended...................................................29957
250.2  (b) removed; (c) redesignated as (b)........................20725
250.11  Amended....................................................31427
250.51  (a) and (c) amended........................................31427
250.171  Amended...................................................31427
250.172  Revised...................................................31427
250.173  (a) and (d) amended; (c) introductory text revised........31427
250.221  (a) and (c) amended.......................................31427
250.307  Amended...................................................31427
250.308  Revised...................................................31427
250.309  (a) and (d) amended; (c) introductory text and (1) 
        revised....................................................31427
251.2  (b) removed; (c) redesignated as (b)........................20725
252  Authority citation revised....................................20725
252.2  (b) removed; (c) redesignated as (b)........................20725
252.216  Amended...................................................20725
270.1  Revised.....................................................54085
270.11  Amended....................................................54085
270.41  (b) removed; (c) redesignated as (b).......................20725
270.351--270.478 (Subpart K)  Added................................54085
275.21  (b) removed; (c) redesignated as (b).......................20725
275.30  Revised....................................................37004
275.31  Revised....................................................37004
275.32  Revised....................................................37004
275.33  Revised....................................................37004
275.34  Revised....................................................37004
275.35  Revised....................................................37004
275.39  Removed; new 275.39 redesignated from 275.39a..............37004
275.39a  Redesignated as 275.39....................................37004
275.63  (a) amended................................................54095
275.72a  Removed; new 275.72a redesignated from 275.72b............37004
275.72b  Redesignated as 275.72a...................................37004
275.72c  Removed...................................................37004
275.85  Concluding text amended....................................54095
275.85a  (b) amended...............................................54095
275.86  Amended....................................................54095
275.115a  (a)(1) and (b)(1) amended................................54095
275.137  Introductory text amended.................................54095
275.140  Amended...................................................54095
275.151--275.153 (Subpart H)  Removed..............................37004
275.183  Removed...................................................37004
285  Removed.......................................................54095
285.2  (b) removed; (c) redesignated as (b)........................20725
290.2  (b) removed; (c) redesignated as (b)........................20725
295.34  Amended....................................................54096
296.171--296.181 (Subpart H)  Removed..............................20725

                                  1997

                       (No Regulations Published)

                                  1998

27 CFR
                                                                   63 FR
                                                                    Page
Chapter I
250.11  Amended....................................................44784
251.11  Amended....................................................44784

                                  1999

27 CFR
                                                                   64 FR
                                                                    Page
Chapter I
200.5  Amended.....................................................49084

[[Page 342]]

200.25  Amended....................................................49084
200.27  Heading and section amended................................49084
200.29  Amended....................................................49084
200.31  Amended....................................................49084
200.35  Amended....................................................49084
200.36  Amended....................................................49084
200.37  Amended....................................................49084
200.38  Amended....................................................49084
200.45  Amended....................................................49084
200.46  Amended....................................................49084
200.48  Introductory text amended..................................49084
200.49  Amended....................................................49084
200.49a  Introductory text amended.................................49084
200.49b  Introductory text and (b) amended.........................49084
    (b) redesignated as (c); new (b) added.........................71923
200.55  (a) introductory text amended..............................49084
200.57  Amended....................................................49084
200.59  Amended....................................................49084
200.60  (a), (b) and (c) amended...................................49084
200.61  Amended....................................................49084
200.62  Amended....................................................49084
200.64  Amended....................................................49084
200.65  Amended....................................................49084
200.70  Amended....................................................49084
200.71  Amended....................................................49084
200.72  Amended....................................................49084
200.73  Amended....................................................49084
200.75  Amended....................................................49084
200.78  Amended....................................................49084
200.79  (b) amended................................................49084
200.80  Amended....................................................49084
200.85  Introductory text amended..................................49084
200.95  Amended....................................................49084
200.105  Amended...................................................49084
200.106  (a) amended...............................................49084
200.107--200.110  Undesignated center heading amended..............49084
200.107  Amended...................................................49084
200.107a  Heading and (a)(3) amended...............................49084
200.109  Amended...................................................49084
200.110  Amended...................................................49084
200.115  Amended...................................................49084
200.116  Amended...................................................49084
200.117  Amended...................................................49084
200.126  Amended...................................................49084
200.129  Amended...................................................49084
252.62  (c) amended................................................46845
270  Heading revised........................................71930, 71939
270.11  Amended.............................................71930, 71939
270.21  Revised....................................................71939
270.22  Removed; new 270.22 redesignated from 270.22a and revised 
                                                                   71939
270.22a  Redesignated as 270.22....................................71939
270.23  Revised....................................................71940
270.25  Revised....................................................71940
270.25a  Revised...................................................71940
270.49  Added......................................................71940
270.61  Revised....................................................71923
270.61a  Revised...................................................71931
270.61b  Removed...................................................71930
270.133  Amended...................................................71931
270.181  Revised...................................................71931
270.182  (a) revised...............................................71931
270.183  Revised...................................................71923
    Introductory text revised......................................71931
    (e) revised....................................................71940
270.184  Revised...................................................71941
270.187  Removed...................................................71941
270.201  Amended...................................................71931
270.202  Introductory text amended.................................71931
270.213  Added.....................................................71924
270.216a  Removed; new 270.216a redesignated from 270.216b.........71931
270.216b  Redesignated as 270.216a; new 270.216b added.............71931
270.216c  Revised..................................................71931
270.231  Amended...................................................71931
270.233  Amended...................................................71924
270.252  Amended...................................................71931
270.255  Amended...................................................71931
270.311  Amended...................................................71932
    (b) revised....................................................71941
270.351  Revised...................................................71941
270.352  Revised...................................................71941
270.421  Revised...................................................71941
270.422  Revised...................................................71942
270.431  Revised...................................................71942
270.476  Amended...................................................71932
275  Authority citation revised.............................71924, 71948
275.1  Revised.....................................................71924
275.11  Amended...............................71924, 71932, 71942, 71948
275.25  Amended....................................................71948
275.29  Added......................................................71942
275.30  Revised....................................................71942
275.31  Revised....................................................71942
275.32  Revised....................................................71943
275.33  Revised....................................................71943
275.34  Revised....................................................71943
275.35  Revised....................................................71943
275.39  Revised....................................................71944

[[Page 343]]

    Removed........................................................71948
275.40  Revised....................................................71948
275.41  Revised....................................................71949
275.50  Amended; undesignated centerheading revised................71949
275.62  Revised....................................................71949
275.72b  Added.....................................................71932
275.81  (a) revised................................................71924
    (c)(7) added...................................................71932
    (c)(1), (4)(ii) and (iii) revised..............................71944
    (b) and (c) introductory text revised..........................71949
275.82  Added......................................................71924
275.83  Added......................................................71924
275.85  Revised....................................................71949
275.85a  Revised...................................................71949
275.86  Amended....................................................71932
    Revised........................................................71950
275.101  (d) and (e) removed.......................................71950
275.106  Revised...................................................71950
275.107  Revised...................................................71932
    (c)(4) revised.................................................71944
    Removed........................................................71950
275.108  Removed...................................................71950
275.110  (e) revised...............................................71932
    (b) and (c) revised............................................71944
    Amended........................................................71950
275.111  Introductory text, (a), (b) and (c) revised...............71950
275.115a  (e) revised..............................................71950
275.117  (e) revised...............................................71932
    (b) and (c) revised............................................71944
    Removed........................................................71951
275.118  Removed...................................................71951
275.121  Amended...................................................71932
275.135--275.141  Undesignated center heading removed..............71951
275.135  Removed...................................................71951
275.136  Removed...................................................71951
275.137  Removed...................................................71951
275.138  Removed...................................................71951
275.139  (a) revised...............................................71933
    (b) and (c) revised............................................71944
275.140  Amended............................................71933, 71951
275.141  Amended............................................71933, 71951
275.170  Amended...................................................71933
    Heading and (b) revised........................................71944
275.172  Amended...................................................71933
    (b) revised....................................................71944
275.181  Revised...................................................71944
275.190--275.208 (Subpart K)  Added................................71951
275.220--275.228 (Subpart L)  Added................................71953
290  Authority citation revised....................................71925
290.11  Amended......................................71925, 71933, 71945
290.61  Revised....................................................71925
290.61a  Amended...................................................71925
290.62  Amended....................................................71925
290.142  Revised...................................................71925
290.143  (b) amended...............................................71925
    (a) revised....................................................71933
290.147  Amended............................................71925, 71933
290.152  Amended...................................................71925
290.153  Amended...................................................71925
290.154  Amended...................................................71925
290.181  Revised...................................................71925
290.198  Amended...................................................71925
290.199  Amended...................................................71926
290.200  Amended...................................................71926
290.201  Amended...................................................71926
290.202  Amended...................................................71926
290.203  Amended...................................................71926
290.204  Amended...................................................71926
290.205  Amended...................................................71926
290.206  Amended...................................................71926
290.207  Amended...................................................71926
290.207a  Amended..................................................71926
290.208  Amended...................................................71926
290.210  Amended...................................................71926
290.213  Amended...................................................71926
290.222  Amended...................................................71933
290.224  Amended...................................................71933
290.225  Amended...................................................71933
290.226  Amended...................................................71933
290.227  Amended...................................................71933
290.232  Amended...................................................71933
290.256  Amended...................................................71926
290.257  Amended...................................................71926
290.258  Amended...................................................71926
290.259  Amended...................................................71926
290.260  Amended...................................................71926
290.261  Amended...................................................71926
290.262  Amended...................................................71926
290.263  Amended...................................................71926
290.264  Amended...................................................71926
290.264a  Amended..................................................71926
290.265  Amended...................................................71926
290.266  Amended...................................................71926
290.267  Amended...................................................71926
295.11  Amended.............................................71933, 71945
295.45b  Revised...................................................71933
295.45c  Added.....................................................71934
295.51  Revised....................................................71945
296  Authority citation revised....................................71958
296.72  Amended....................................................71934
296.74  Amended....................................................71934
    Revised........................................................71945
296.71--296.80 (Subpart C)  Heading revised........................71945
296.72  Amended....................................................71945
296.75  Revised....................................................71945

[[Page 344]]

296.76  Revised....................................................71946
296.77  Revised....................................................71946
296.81  Undesignated centerheading and section added...............71947
296.163  Amended...................................................71934
296.191--296.274 (Subpart I)  Revised..............................71958

                                  2000

27 CFR
                                                                   65 FR
                                                                    Page
Chapter I
270.187  Correctly redesignated from 270.187a and amended...........1676
270.187a  Correctly redesignated as 270.187.........................1676
270.216b  Revised..................................................57547
270.216c  Revised..................................................40051
275  Authority citation correctly revised..........................15058
275.11  Amended....................................................63545
275.39  Reinstated.................................................15058
275.72b  Revised...................................................57547
275.72c  Added.....................................................40051
275.81  (b) and (c) introductory text correctly revised............15059
275.105  Amended...................................................69253
275.117  Reinstated................................................15059
275.117  (e) corrected.............................................31079
    Removed........................................................45523
295.45b  Revised...................................................57547
295.45c  Revised...................................................40051

                                  2001

   (Regulations published from January 1, 2001, through April 1, 2001)

27 CFR
                                                                   66 FR
                                                                    Page
Chapter I
270.165  OMB number................................................16602
270.165a  OMB number...............................................16602
270.216  OMB number................................................16602
275  Authority citation revised....................................13850
275.11  Amended....................................................13850
275.29  Amended....................................................13850
275.72  OMB number.................................................16602
275.105  Revised...................................................13850
275.106  Revised...................................................13850
275.110  Revised...................................................13851
275.111  Revised...................................................13851
275.114  (b)(1) and (2) amended....................................13851
275.121  Revised...................................................13851