[Federal Register Volume 60, Number 177 (Wednesday, September 13, 1995)]
[Proposed Rules]
[Pages 47506-47512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22577]



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DEPARTMENT OF THE TREASURY
Bureau of Alcohol, Tobacco and Firearms

27 CFR Parts 4, 5, 7, 13, and 19

[Notice No. 815]
RIN 1512-AB34


Procedures for the Issuance, Denial, and Revocation of 
Certificates of Label Approval, Certificates of Exemption From Label 
Approval, and Distinctive Liquor Bottle Approvals (93F-029P)

AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Bureau of Alcohol, Tobacco and Firearms (ATF) is proposing 
to issue regulations specifically setting forth the procedures for the 
issuance, denial, and revocation of certificates of label approval 
(COLAs), certificates of exemption from label approval, and distinctive 
liquor bottle approvals. The proposed denial and revocation regulations 
are new, whereas the proposed issuance regulations are more specific 
than the current regulations. The proposed regulations would also 
codify the procedures for administratively appealing the denial or 
revocation of certificates of label approval, exemptions from label 
approval, or distinctive liquor bottle approvals.

DATES: Written comments to this proposed rule must be received by 
December 12, 1995.

ADDRESSES: Send written comments to: Chief, Wine, Beer and Spirits 
Regulations Branch, Bureau of Alcohol, Tobacco and Firearms, P.O. Box 
50221, Washington, DC 20091-0221 (Attn: Notice No. 815).
    Copies of the proposed regulation and any written comments received 
will be available for public inspection during normal business hours 
at: ATF Reading Room, Office of Public Affairs and Disclosure, Room 
6480, 650 Massachusetts Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Robert White, Coordinator, Wine, Beer 
and Spirits Regulations Branch, Bureau of Alcohol, Tobacco and 
Firearms, 650 Massachusetts Avenue NW., Washington, DC 20226 (202-927-
8230).

SUPPLEMENTARY INFORMATION:

Background

    The Federal Alcohol Administration (FAA) Act, 27 U.S.C. 
Sec. 205(e), provides ATF, as the delegate of the Secretary of the 
Treasury, with authority to promulgate regulations with respect to the 
bottling, packaging, and labeling of distilled spirits, wine, and malt 
beverages in order to prohibit deception of the consumer, and provide 
the consumer with adequate information as to the identity and quality 
of the product.
    In order to carry out such requirements, domestic bottlers and 
producers are prohibited from bottling distilled spirits, wines, or 
malt beverages, and importers are prohibited from removing bottled 
distilled spirits, wines, or malt beverages from Customs custody, 
unless they have in their possession a certificate of label approval 
covering such products, ``issued by the Secretary in such manner and 
form as he shall by regulations prescribe.'' 27 U.S.C. Sec. 205(e). The 
law provides an exemption from these requirements for products which 
are not to be sold, offered for sale, or shipped or delivered for 
shipment, or otherwise introduced in interstate or foreign commerce.
    The regulations implementing these statutory provisions provide 
that no person shall bottle or pack wine, distilled spirits, or malt 
beverages unless application is made to the Director and an approved 
certificate of label approval, ATF Form 5100.31, is issued. 27 CFR 
Secs. 4.50(a), 5.55(a), and 7.41. The regulations also provide that no 
bottled wines, distilled spirits, or malt beverages shall be released 
from Customs custody for consumption unless an approved certificate of 
label approval, ATF Form 5100.31, is deposited with the appropriate 
Customs officer at the port of entry. 27 CFR Secs. 4.40(a), 5.51(a), 
and 7.31(a).
    A bottler of wine or distilled spirits who can show to the 
satisfaction of the Director that the product is not to be sold, 
offered for sale, or shipped or delivered for shipment or otherwise 
introduced in interstate or foreign commerce, must make application for 
exemption from the labeling requirements of the FAA Act on ATF Form 
5100.31 in accordance with the instructions on the form. If the 
application is approved, a certificate of exemption from label approval 
will be issued on the same form. 27 CFR Secs. 4.50(b) and 5.55(b). 
Certificates of exemption from label approval are not issued for malt 
beverages.
    Finally, the ATF Form 5100.31 is also used to obtain approval for 
distinctive liquor bottles, pursuant to the regulations appearing at 27 
CFR Sec. 19.633(a). ATF's authority to regulate liquor bottles is 
derived from section 5301 of the Internal Revenue Code of 1986, 26 
U.S.C. Sec. 5301. However, the approval of a distinctive liquor bottle 
also includes the approval of the label on that bottle, pursuant to the 
FAA Act.

Revocation of COLAs

    ATF reviews over 60,000 applications for certificates of label 
approval, exemptions from label approval, and distinctive liquor bottle 
approvals every year. There is no doubt that errors will occasionally 
occur in the approval process. Thus, there is clearly a necessity for 
some type of revocation procedure.
    Since the enactment of the FAA Act in 1935, ATF and its predecessor 
agencies have taken the position that the statutory authority to issue 
certificates of label approval also included an implied statutory 
authority to cancel or revoke such certificates in the event that such 
certificates were approved in error. There have never been formal 
procedures in the regulations for denial or revocation of certificates 
of label approval. However, ATF has utilized informal procedures for 
denials and revocations, where applicants or certificate holders who 
wished to contest a denial or revocation were given an opportunity to 
do so in writing, or through informal meetings with Bureau officials.
    The certificate of label approval was never intended to convey any 
type of proprietary interest to the certificate holder. On the 
contrary, Paragraph III(1)(c) of Form 5100.31 provides that ``[t]his 
certificate is issued for Bureau of Alcohol, Tobacco and Firearms use 
only and does not constitute trademark protection, or relieve any 
person from liability for violations of the FAA Act and related 
regulations and rulings.'' The certificate of label approval is a 
statutorily mandated tool used to help ATF in its enforcement of the 
labeling requirements of the FAA Act. 

[[Page 47507]]

    Recently, however, ATF's procedures for revocation of COLAs were 
subject to challenge in the Federal District Court for the Northern 
District of California. In Cabo Distributing Co. v. Brady, 821 F. Supp. 
601 (N.D. Cal. 1992), the court set aside ATF's revocation of labels 
for ``Black Death'' vodka on several grounds. The court held that there 
was no express statutory or regulatory authority for the Bureau to 
cancel certificates of label approval, and that the Bureau had implied 
authority to reverse its actions only in limited circumstances. The 
court thus concluded that ``[w]ithout statutory authority or regulatory 
authority, the BATF [sic] cannot cancel a certificate of label 
approval.'' 821 F. Supp. at 612. The court also held that the Bureau's 
informal procedures for revoking the ``Black Death'' certificates of 
label approval had not afforded the certificate holders their 
constitutional right to procedural due process. 821 F. Supp. at 612.
    ATF does not agree with the court's decision on either of these two 
holdings. ATF believes that a right to cancel certificates of label 
approval is implied from the statute's delegation to the Secretary of 
the authority to issue certificates of label approval ``in such manner 
and form as he shall by regulations prescribe* * *'' The statute thus 
explicitly authorizes ATF, as a delegate of the Secretary, to issue 
regulations governing the procedure for the issuance of certificates of 
label approval. There is also implicit statutory authority to issue 
regulations governing the procedures for denying and revoking 
certificates of label approval.
    ATF believes that the procedures which it has been using for 
revoking certificates of label approval, although not codified in the 
regulations, have provided certificate holders with due process of law. 
However, in order to clarify its authority and procedures for 
revocation of label approvals, ATF is proposing to adopt new 
regulations in a new Part 13 which will set forth procedures for 
revoking such approvals and for appealing such revocations. The 
procedures will also provide applicants with the opportunity to 
administratively appeal the denial of applications for label approval. 
Finally, the procedures will also cover certificates of exemption from 
label approval and distinctive liquor bottle approvals, since these are 
issued on the same form as certificates of label approval.

Proposed Procedures

    ATF is proposing to issue regulations specifically setting forth 
the procedures for the issuance, denial, and revocation of certificates 
of label approval, certificates of exemption from label approval, and 
distinctive liquor bottle approvals. The proposed denial and revocation 
regulations are new, whereas the proposed issuance regulations are more 
specific than the current regulations. The proposed regulations would 
also codify the procedures for administratively appealing the denial or 
revocation of certificates of label approval, exemptions from label 
approval, and distinctive liquor bottle approvals. ATF believes that 
the proposed regulations would afford applicants and certificate 
holders with more than adequate due process of law. ATF also believes 
that the codification of these procedures in regulations will eliminate 
any questions as to its authority to revoke certificates of label 
approval, exemptions from label approval, and distinctive liquor bottle 
approvals.
    Under current regulations, the authority to approve certificates of 
label approval, exemptions from label approval, and distinctive liquor 
bottle applications rests with the Director. When an application for 
label approval, exemption from label approval, or distinctive liquor 
bottle approval is approved, the signature of the Director is affixed 
to the form, with the date, and any qualifications are marked in the 
appropriate space on the form. The approved ATF Form 5100.31 is then 
sent to the applicant. If an application is denied for any reason, the 
applicant is sent an ATF Form 5190.1, ``ATF F 5100.31 Correction 
Sheet,'' with the reasons for the denial briefly noted on the form. The 
proposed regulations will codify this practice.
    The proposed regulations afford the applicant an opportunity to 
file a written appeal of the denial of an application for a certificate 
of label approval, certificate of exemption from label approval, or 
distinctive liquor bottle approval, with the Chief, Labeling Section, 
Product Compliance Branch, within 45 days after the date of the notice 
of denial. Such an appeal should explain the basis for the applicant's 
belief that the denial was erroneous, and that the subject label or 
bottle is in compliance with all applicable laws and regulations. After 
considering all relevant facts and issues presented in writing by the 
applicant, the Chief, Labeling Section, shall issue a final decision on 
the denial of the application.
    With respect to revocations of certificates of label approval, 
certificates of exemption from label approval, or distinctive liquor 
bottle approvals, the proposed regulations provide that the Chief, 
Product Compliance Branch, shall provide the certificate holder with a 
notice of proposed revocation prior to taking any action with respect 
to the label or distinctive liquor bottle. The certificate holder shall 
have 45 days from the date of the notice in which to present written 
arguments as to why the revocation should not occur. After considering 
any arguments or facts presented during this 45-day period, the Chief, 
Product Compliance Branch, shall issue a decision. If the decision is 
to revoke the label or distinctive liquor bottle approval, the 
certificate holder shall then have 45 days from the date of the 
decision of the Chief, Product Compliance Branch, to file a written 
appeal with the Chief, Alcohol and Tobacco Programs Division. The 
written appeal should include all pertinent arguments and evidence 
which the certificate holder wishes to present. The decision of the 
Chief, Alcohol and Tobacco Programs Division, shall be the final 
decision of the Bureau.
    The proposed regulations authorize applicants or certificate 
holders to request informal conferences at each stage of the 
administrative appeal process. The decision whether to grant such 
requests lies entirely within the discretion of the official 
considering the administrative appeal. It should be noted that the 
issue of informal conferences arose during the litigation over the 
``Black Death'' labels. To avoid any possible misunderstandings which 
might arise out of inconsistent recollections by meeting participants, 
the proposed regulations will clarify that informal conferences are not 
on the record. To the extent that an applicant or certificate holder 
wishes to rely on arguments or evidence presented at an informal 
conference, he or she must present such arguments or evidence in 
writing to the decision maker within 10 days after the date of the 
conference.

Exception to Notice of Proposed Revocation Requirement

    The proposed regulations provide that where there is a change in 
labeling requirements by operation of law or regulation, there is no 
requirement to issue a notice of proposed revocation prior to notifying 
a certificate holder of the revocation of a certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle approval. In these cases, the burden of ensuring that 
affected labels are in compliance with the new requirements imposed by 
statute or regulation should be on the certificate holder, not ATF. If 
ATF determines that a label or bottle which is not in 

[[Page 47508]]
compliance with the new statutory or regulatory requirements is still 
being used, the Chief, Product Compliance Branch, will issue a letter 
notifying the certificate holder that the certificate has been revoked 
by operation of law or regulation. If the certificate holder wishes to 
challenge the application of the law or regulation to the particular 
label or bottle, he or she may appeal the decision, in writing, to the 
Chief, Alcohol and Tobacco Programs Division.
    If the proposals in this notice are adopted, regulations in Parts 
4, 5, 7, and 19 will be amended to cross reference the procedures 
enumerated in Part 13.

Public Participation

    ATF requests all interested parties to submit written comments 
concerning the issuance, denial, revocation, and appeal procedures 
proposed in this notice of proposed rulemaking. Comments received on or 
before the closing date will be carefully considered. Comments received 
after that date will be given the same consideration if it is practical 
to do so, but assurance of consideration cannot be given except as to 
comments received on or before the closing date.
    ATF will not recognize any material or comment as confidential. 
Comments may be disclosed to the public. Any material which the 
respondent considers to be confidential or inappropriate for disclosure 
to the public should not be included in the comment. The names of 
commenters are not exempt from disclosure.
    Written comments will be available for public inspection during 
normal business hours at the following address: ATF Reading Room, 
Office of Public Affairs and Disclosure, Room 6480, 650 Massachusetts 
Avenue, NW., Washington, DC.

Regulatory Flexibility Act

    It is hereby certified that this regulation will not have a 
significant economic impact on a substantial number of small entities. 
The regulation will give ATF specific regulatory authority to issue, 
deny or revoke certificates of label approval, exemptions from label 
approval, and distinctive liquor bottle approvals. The regulation will 
not increase recordkeeping or reporting requirements. Accordingly, a 
regulatory flexibility analysis is not required because the proposal, 
if promulgated as a final rule, is not expected (1) to have significant 
secondary, or incidental effects on a substantial number of small 
entities; or (2) to impose, or otherwise cause a significant increase 
in the reporting, recordkeeping, or other compliance burdens on a 
substantial number of small entities.
Executive Order 12866

    It has been determined that this proposed regulation is not a 
significant regulatory action as defined by Executive Order 12866. 
Accordingly, this proposal is not subject to the analysis required by 
this Executive Order.

Paperwork Reduction Act

    The provisions of the Paperwork Reduction Act of 1980, Pub. L. 96-
511, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR Part 
1320, do not apply to this notice because no requirement to collect 
information is proposed.

Drafting Information

    The principal author of this document is Robert L. White, Wine, 
Beer and Spirits Regulations Branch, Bureau of Alcohol, Tobacco and 
Firearms.

27 CFR Part 4

    Advertising, Consumer protection, Customs duties and inspection, 
Imports, Labeling, Packaging and containers, Wine.

27 CFR Part 5

    Advertising, Consumer protection, Customs duties and inspection, 
Imports, Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Trade practices.

27 CFR Part 7

    Advertising, Beer, Consumer protection, Customs duties and 
inspection, Imports, Labeling.

27 CFR Part 13

    Administrative practice and procedure, Alcohol and alcoholic 
beverages, Appeals, Applications, Certificates of label approval, 
Certificates of exemption from label approval, Denials, Distinctive 
liquor bottle approvals, Informal conferences, Labeling, Revocations.

27 CFR Part 19

    Administrative practice and procedure, Alcohol and alcoholic 
beverages, Authority delegations, Claims, Chemicals, Customs duties and 
inspection, Electronic fund transfers, Excise taxes, Exports, Gasohol, 
Imports, Labeling, Liquors, Packaging and containers, Puerto Rico, 
Reporting and recordkeeping requirements, Research, Security measures, 
Spices and flavorings, Surety bonds, Transportation, Virgin Islands, 
Warehouses, Wine.

Authority and Issuance

    Chapter I of Title 27, Code of Federal Regulations, is proposed to 
be amended as follows:

PART 4--LABELING AND ADVERTISING OF WINE

    Paragraph 1. The authority citation for part 4 continues to read as 
follows:

    Authority: 27 U.S.C. 205, unless otherwise noted.

    Par. 2. Section 4.40 is amended to add paragraph (d) to read as 
follows:


Sec. 4.40  Label approval and release.

* * * * *
    (d) Cross reference. For procedures regarding the issuance, denial 
and revocation of certificates of label approval, as well as appeal 
procedures, see Part 13 of this chapter.
    Par. 3. Section 4.50 is amended to add paragraph (c) to read as 
follows:


Sec. 4.50  Certificates of label approval.

* * * * *
    (c) Cross reference. For procedures regarding the issuance, denial 
and revocation of certificates of label approval, and certificates of 
exemption from label approval, as well as appeal procedures, see Part 
13 of this chapter.

PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS

    Par. 4. The authority citation for part 5 continues to read as 
follows:

    Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 205.

    Par. 5. Section 5.46 is amended to revise paragraph (d) to read as 
follows:


Sec. 5.46  Standard liquor bottles.

* * * * *
    (d) Exceptions--(1) Distinctive Liquor Bottles. The headspace and 
design requirements in paragraphs (b) and (c) of this section do not 
apply to liquor bottles which are specifically exempted by the 
Director, pursuant to an application filed by the bottler or importer.
    (2) Cross reference. For procedures regarding the issuance, denial 
and revocation of distinctive liquor bottle approvals, as well as 
appeal procedures, see Part 13 of this chapter.
    Par. 6. Section 5.51 is amended to add paragraph (e) to read as 
follows:


Sec. 5.51  Label approval and release.

* * * * *
    (e) Cross reference. For procedures regarding the issuance, denial 
and revocation of certificates of label approval, as well as appeal 
procedures, see part 13 of this chapter. 

[[Page 47509]]

    Par. 7. Section 5.55 is amended to add paragraph (d) to read as 
follows:


Sec. 5.55  Certificates of label approval.

* * * * *
    (d) Cross reference. For procedures regarding the issuance, denial 
and revocation of certificates of label approval and certificates of 
exemption from label approval, as well as appeal procedures, see Part 
13 of this chapter.

PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES

    Par. 8. The authority citation for Part 7 continues to read as 
follows:

    Authority: 27 U.S.C. 205.

    Par. 9. Section 7.31 is amended to add paragraph (d) to read as 
follows:


Sec. 7.31  Label approval and release.

* * * * *
    (d) Cross reference. For procedures regarding the issuance, denial 
and revocation of certificates of label approval, as well as appeal 
procedures, see part 13 of this chapter.
    Par. 10. Section 7.41 is revised to read as follows:


Sec. 7.41  Certificates of label approval.

    (a) Requirement. No person shall bottle or pack malt beverages, or 
remove malt beverages from the plant where bottled or packed unless 
application is made to the Director, and an approved certificate of 
label approval, ATF Form 5100.31, is issued by the Director.
    (b) Cross reference. For procedures regarding the issuance, denial 
and revocation of certificates of label approval, as well as appeal 
procedures, see part 13 of this chapter.
    Par. 11. Part 13 is added to read as follows:

PART 13--LABELING PROCEEDINGS

Subpart A--Scope and Construction of Regulations
Sec.
13.1  Scope of part.

Subpart B--Definitions

13.5  Meaning of terms.

Subpart C--Applications

13.11  Application for certificate.
13.12  Notice of denial.
13.13  Appeal of denials.
13.14  Final decision after appeal of denial.

Subpart D--Revocations

13.20  Revocation of certificates.
13.21  Notice of proposed revocation.
13.22  Decision after notice of proposed revocation.
13.23  Appeal of revocation.
13.24  Final decision after appeal.
Subpart E--Revocation by Operation of Law or Regulation
13.35  Revocation by operation of law or regulation.
13.36  Notice of revocation.
13.37  Appeal of notice of revocation.
13.38 Decision after appeal.

Subpart F--Miscellaneous

13.40  Informal conferences.
13.45  Effective dates of revocations.
13.50  Effect of revocations.
13.55  Service on applicant or certificate holder.
13.60  Representation before the Bureau.
13.65  Computation of time.
13.70  Extensions.

    Authority: 270 U.S.C. 205(e) and 26 U.S.C. 5301.
Subpart A--Scope and Construction of Regulations


Sec. 13.1   Scope of part.

    The regulations in this part govern the procedure and practice in 
connection with the issuance, denial, and revocation of certificates of 
label approval, certificates of exemption from label approval, and 
distinctive liquor bottle approvals under 27 U.S.C. 205(e) and 26 
U.S.C. 5301. The regulations in this part also provide for appeal 
procedures when applications for label approval, exemptions from label 
approval, or distinctive liquor bottle approvals are denied, or when 
these applications are approved and then subsequently revoked.

Subpart B--Definitions


Sec. 13.5  Meaning of terms.

    Where 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.
    Act. The Federal Alcohol Administration Act.
    Applicant. The permittee or brewer whose name, address, and basic 
permit number, or plant registry number, appears on an unapproved ATF F 
5100.31, application for a certificate of label approval, certificate 
of exemption from label approval, or distinctive liquor bottle 
approval.
    ATF. The Bureau of Alcohol, Tobacco and Firearms, Department of the 
Treasury, Washington, DC 20226.
    Brewer. Any person who brews beer (except a person who produces 
only beer exempt from tax under 26 U.S.C. 5053(e)) and any person who 
produces beer for sale.
    Certificate holder. The permittee or brewer whose name, address, 
and basic permit number, or plant registry number, appears on an 
approved ATF F 5100.31, certificate of label approval, certificate of 
exemption from label approval, or distinctive liquor bottle approval.
    Certificate of exemption from label approval. A certificate issued 
on ATF F 5100.31 which authorizes the bottling of wine or distilled 
spirits, under the condition that the product will under no 
circumstances be sold, offered for sale, shipped, delivered for 
shipment, or otherwise introduced by the applicant, directly or 
indirectly, into interstate or foreign commerce.
    Certificate of label approval. A certificate issued on ATF F 
5100.31 which authorizes the bottling or packing of wine, distilled 
spirits, or malt beverages, or the removal of bottled wine, distilled 
spirits, or malt beverages from Customs custody for introduction into 
commerce, as long as the product bears labels identical to the labels 
affixed to the face of the certificate, or labels with changes 
authorized by the certificate.
    Chief, Alcohol and Tobacco Programs Division. The ATF official 
responsible under this part for deciding appeals of revocations of:
    (1) Certificates of label approval;
    (2) Certificates of exemption from label approval; and
    (3) Distinctive liquor bottle approvals.

Chief, Labeling Section, Product Compliance Branch.

    The ATF official responsible under this part for deciding appeals 
of denials of applications for:
    (1) Certificates of label approval;
    (2) Certificates of exemption from label approval; and
    (3) Distinctive liquor bottle approvals.
    Chief, Product Compliance Branch. The ATF official responsible 
under this part for issuing revocations of
    (1) Certificates of label approval;
    (2) Certificates of exemption from label approval; and
    (3) Distinctive liquor bottle approvals.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, 
the Department of the Treasury, Washington, DC.
    Distilled spirits. Ethyl alcohol, hydrated oxide of ethyl, spirits 
of wine, whisky, rum, brandy, gin, and other distilled spirits, 
including all dilutions and mixtures thereof for nonindustrial use. The 
term ``distilled spirits'' shall not include mixtures containing wine, 

[[Page 47510]]
bottled at 48 degrees of proof or less, if the mixture contains more 
than 50 percent wine on a proof gallon basis.
    Distinctive liquor bottle. A liquor bottle of distinctive shape or 
design.
    Distinctive liquor bottle approval. Approval issued on ATF F 
5100.31 which authorizes the bottling of distilled spirits, or the 
removal of bottled distilled spirits from Customs custody for 
introduction into commerce, as long as the bottle is identical to the 
photograph affixed to the face of the form.
    Interstate or foreign commerce. Commerce between any State and any 
place outside thereof, or commerce within any Territory or the District 
of Columbia, or between points within the same State but through any 
place outside thereof.
    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 protect the revenue adequately.
    Malt beverage. A beverage made by the alcoholic fermentation of an 
infusion or decoction, or combination of both, in potable brewing 
water, of malted barley with hops, or their parts, or their products, 
and with or without other malted cereals, and with or without the 
addition of unmalted or prepared cereals, other carbohydrates, or 
products prepared therefrom, and with or without the addition of carbon 
dioxide, and with or without other wholesome products suitable for 
human food consumption.
    Permittee. Any person holding a basic permit under the Federal 
Alcohol Administration Act.
    Person. Any individual, partnership, joint stock company, business 
trust, association, corporation, or other form of business enterprise, 
including a receiver, trustee, or liquidating agent and including an 
officer or employee of any agency of a State or political subdivision 
thereof.
    Product Compliance Branch Specialist. An ATF official--
    (1) Responsible under this part for reviewing initial applications 
for:
    (i) Certificates of label approval;
    (ii) Certificates of Exemption from label approval; and
    (iii) Distinctive liquor bottle approvals; and
    (2) With authority to affix the Director's signature to approved 
certificates and to issue an ``ATF F 5100.31 Correction Sheet'' along 
with any denial of an application.
    United States. The several States and Territories and the District 
of Columbia; the term ``State'' includes a Territory and the District 
of Columbia; and the term ``Territory'' means the Commonwealth of 
Puerto Rico.
    Use of other terms. Any other term defined in the Federal Alcohol 
Administration Act and used in this part shall have the same meaning 
assigned to it by the Act.
    Wine. (1) Wine as defined in section 610 and section 617 of the 
Revenue Act of 1918 (26 U.S.C. 3036, 3044, 3045) and
    (2) Other alcoholic beverages not so defined, but made in the 
manner of wine, including sparkling and carbonated wine, wine made from 
condensed grape must, wine made from other agricultural products than 
the juice of sound, ripe grapes, imitation wine, compounds sold as 
wine, vermouth, cider, perry, and sake; in each instance only if 
containing not less than 7 percent, and not more than 24 percent of 
alcohol by volume, and if for nonindustrial use.

Subpart C--Applications


Sec. 13.11  Application for certificate.

    An applicant for a certificate of label approval, certificate of 
exemption from label approval, or distinctive liquor bottle approval, 
shall send signed duplicate copies of ATF Form 5100.31, ``Application 
for and Certification/Exemption of Label/Bottle Approval'' to the 
Product Compliance Branch, Bureau of Alcohol, Tobacco and Firearms, 
Washington, D.C. 20226. If the application evidences compliance with 
all applicable laws and regulations, a certificate of label approval, 
certificate of exemption from label approval, or distinctive liquor 
bottle approval shall be issued, and the Director's signature shall be 
affixed to the form. If the approval is qualified in any manner, such 
qualifications shall be set forth in the appropriate space on the form.


Sec. 13.12  Notice of denial.

    Whenever an application for a certificate of label approval, 
certificate of exemption from label approval, or distinctive liquor 
bottle approval is denied, a Product Compliance Branch Specialist shall 
issue to the applicant a notice of denial on ATF Form 5190.1, entitled 
``ATF F 5100.31 Correction Sheet,'' briefly setting forth the reasons 
why the label or bottle is not in compliance with the applicable laws 
or regulations. The applicant may then submit a new application for 
approval after making the necessary corrections.


Sec. 13.13  Appeal of denials.

    If an applicant for a certificate of label approval, certificate of 
exemption from label approval, or distinctive liquor bottle approval 
wishes to appeal the denial of an application, he or she may file a 
written appeal with the Chief, Labeling Section, Product Compliance 
Branch, within 45 days after the date of the notice of denial. Such an 
appeal should explain the basis for the applicant's belief that the 
subject label or bottle is in compliance with the applicable laws and 
regulations. If no appeal is filed within 45 days after the date of the 
notice of denial, such notice of denial shall be the final decision of 
the Bureau.


Sec. 13.14  Final decision after appeal of denial.

    After considering any written arguments or evidence presented by 
the applicant or his or her representative, the Chief, Labeling 
Section, Product Compliance Branch, shall issue a written decision to 
the applicant. If the decision is that the denial should stand, a copy 
of the application, marked ``appeal denied,'' shall be returned to the 
applicant, along with a brief explanation of the basis for the denial 
and the specific laws or regulations relied upon in denying the 
application. If the decision is that the certificate of label approval, 
certificate of exemption from label approval, or distinctive liquor 
bottle application should be approved, ATF Form 5100.31 shall be issued 
in accordance with usual procedures. The decision of the Chief, 
Labeling Section, Product Compliance Branch, shall be the final 
decision of the Bureau.

Subpart D--Revocations


Sec. 13.20  Revocation of certificates.

    Certificates of label approval, certificates of exemption from 
label approval, and distinctive liquor bottle approvals, previously 
approved on ATF Form 5100.31, may be revoked by the Chief, Product 
Compliance Branch, upon a finding that the label or bottle at issue is 
not in compliance with the applicable laws or regulations.


Sec. 13.21  Notice of proposed revocation.

    Except as provided in Sec. 13.35, when the Chief, Product 
Compliance Branch, determines that a certificate of label approval, 
certificate of exemption from label approval, or distinctive liquor 
bottle approval has been issued for a label or bottle which is not in 
compliance with the laws or regulations, he or she shall issue to the 
certificate holder a notice of proposed 

[[Page 47511]]
revocation which shall set forth the basis for the proposed revocation 
and shall provide the certificate holder with 45 days from the date of 
the notice in which to present written arguments or evidence as to why 
the revocation should not occur.


Sec. 13.22  Decision after notice of proposed revocation.

    After considering any written arguments or evidence presented by 
the certificate holder or his or her representative, the Chief, Product 
Compliance Branch, shall issue a decision. If the decision is to revoke 
the certificate, a letter shall be issued explaining the basis for the 
revocation of the certificate, and the specific laws or regulations 
relied upon in determining that the label or bottle was not in 
conformance with law or regulations. If the decision is to withdraw the 
proposed revocation, a letter to that effect shall be issued.


Sec. 13.23  Appeal of revocation.

    A certificate holder who wishes to appeal the decision of the 
Chief, Product Compliance Branch, to revoke a certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle approval, may file a written appeal with the Chief, 
Alcohol and Tobacco Programs Division, setting forth the grounds on 
which he or she believes that the decision of the Chief, Product 
Compliance Branch, was erroneous. Such appeal must be filed with the 
Chief, Alcohol and Tobacco Programs Division, within 45 days after the 
date of the decision of the Chief, Product Compliance Branch.


Sec. 13.24  Final decision after appeal.

    After considering any written arguments or evidence presented by 
the certificate holder or his or her representative, the Chief, Alcohol 
and Tobacco Programs Division, shall issue a written decision to the 
certificate holder. If the decision is to revoke the certificate of 
label approval, certificate of exemption from label approval, or 
distinctive liquor bottle approval, a letter shall be issued explaining 
the basis for the revocation, and the specific laws or regulations 
relied upon in determining that the label or bottle was not in 
conformance with law or regulations. If the decision is to withdraw the 
proposed revocation, a letter to that effect shall be sent to the 
certificate holder. The decision of the Chief, Alcohol and Tobacco 
Programs Division, shall be the final decision of the Bureau.
Subpart E--Revocation by Operation of Law or Regulation


Sec. 13.35  Revocation by operation of law or regulation.

    ATF will not individually notify all holders of certificates of 
label approval, certificates of exemption from label approval, or 
distinctive liquor bottle approvals, that such approvals have been 
revoked in situations where such revocation occurs by operation of law 
or regulation.
    Where changes in labeling or other requirements are made as a 
result of amendments or revisions to the law or regulations, it is the 
responsibility of the certificate holder to voluntarily surrender all 
certificates which are no longer in compliance, and to submit 
applications for new certificates in compliance with the new 
requirements; Provided, that in certain circumstances, ATF may announce 
that the submission of new applications for label approval is not 
necessary in order to implement a new requirement in the law or 
regulations. In such circumstances, it is the responsibility of the 
certificate holder to ensure that labels are in compliance with the 
requirements of the new regulations or law, notwithstanding the fact 
that new applications for label approval were not required.


Sec. 13.36  Notice of revocation.

    If ATF determines that a certificate holder is still using a 
certificate of label approval, certificate of exemption from label 
approval, or distinctive liquor bottle approval which is no longer in 
compliance due to amendments or revisions in the law or regulations, 
the Chief, Product Compliance Branch, will notify the certificate 
holder in writing that the subject certificate has been revoked by 
operation of law or regulations, with a brief description of the 
grounds for such revocation.


Sec. 13.37  Appeal of notice of revocation.

    Within 45 days after the date of a notice of revocation by 
operation of law or regulations, the certificate holder may file a 
written appeal with the Chief, Alcohol and Tobacco Programs Division. 
The appeal should set forth the reasons why the certificate holder 
believes that the regulation or law at issue does not require the 
revocation of the certificate.


Sec. 13.38  Decision after appeal.

    After considering all written arguments and evidence submitted by 
the certificate holder, the Chief, Alcohol and Tobacco Programs 
Division, shall issue a final decision regarding the revocation by 
operation of law or regulation of the certificate. If the decision is 
that the law or regulation at issue requires the revocation of the 
certificate of label approval, certificate of exemption from label 
approval, or distinctive liquor bottle approval, a letter shall be 
issued explaining the basis for the revocation, and citing the specific 
laws or regulations which required the revocation of the certificate. 
If the decision is that the law or regulation at issue does not require 
the revocation of such certificate, a letter to that effect shall be 
sent to the certificate holder. The decision of the Chief, Alcohol and 
Tobacco Programs Division, shall be the final decision of the Bureau.

Subpart F--Miscellaneous


Sec. 13.40  Informal conferences.

    (a) General. As part of a timely filed written appeal of a notice 
of denial, a notice of proposed revocation, or a decision of the Chief, 
Product Compliance Branch, to revoke a certificate, an applicant or 
certificate holder may file a written request for an informal 
conference with the ATF official deciding the appeal. However, the 
decision whether to hold an informal conference is at the sole 
discretion of the deciding official.
    (b) Informal conference procedures. If the deciding official 
determines that the holding of an informal conference would be 
beneficial, he or she shall inform the applicant or certificate holder, 
and a date shall be agreed upon. The informal conference is for 
purposes of discussion only, and no transcript shall be made. If the 
applicant or certificate holder wishes to rely upon arguments, facts, 
or evidence presented at the informal conference, he or she has 10 days 
after the date of the conference to incorporate such arguments, facts, 
or evidence in a written submission to the deciding official.
Sec. 13.45  Effective dates of revocations.

    With the exception of revocations occurring pursuant to Sec. 13.35, 
ATF shall allow at least 45 days between the issuance of a decision to 
revoke a certificate, and the actual revocation of the certificate. The 
deciding official may, at his or her discretion, allow the certificate 
holder a longer period of time in which to use up the existing stock of 
labels or distinctive liquor bottles. The decision to allow such a 
``use-up'' period, and the length of the ``use-up'' period allowed, are 
matters committed entirely to the discretion of the deciding official, 
based on the circumstances of the case. 

[[Page 47512]]



Sec. 13.50  Effect of revocations.

    (a) General. On the effective date of a final decision which has 
been issued by the Chief, Product Compliance Branch, or the Chief, 
Alcohol and Tobacco Programs Division, to revoke a certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle approval, the certificate holder shall be asked to 
surrender the original of such certificate to ATF for manual 
cancellation. Regardless of whether the original certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle approval has been manually cancelled or not, the 
certificate shall be null and void after the effective date of the 
certificate's revocation. It shall be a violation of this section for 
any certificate holder to present a certificate of label approval, 
certificate of exemption from label approval, or distinctive liquor 
bottle approval to an official of the United States Government as a 
valid certificate, after the effective date of the revocation of the 
certificate, if the certificate holder has been previously notified 
that such certificate has been revoked by ATF.
    (b) Use of certificate during period of appeal. If a certificate 
holder files a timely appeal after receipt of a notice of revocation 
from the Chief, Product Compliance Branch pursuant to section 13.22, he 
or she may continue to use the certificate at issue until the effective 
date of a final decision issued by the Chief, Alcohol and Tobacco 
Programs Division. However, the effective date of a notice of 
revocation by operation of law or regulations, issued pursuant to 
Sec. 13.36, is not stayed during the pendency of an appeal.


Sec. 13.55  Service on applicant or certificate holder.

    Notices of denial, notices of proposed revocation, and notices of 
revocation shall be served on an applicant or a certificate holder by 
first class mail, or by personal delivery. When service is by mail, a 
signed duplicate original copy of the document shall be mailed to the 
applicant or certificate holder at the address stated in the 
application for a certificate of label approval, or at the last known 
address. If authorized by the applicant or certificate holder, the 
signed duplicate original copy of the document may be mailed to a 
designated representative. Where service is by personal delivery, a 
signed duplicate original copy of the document shall be delivered to 
the certificate holder or to a designated representative, or, in the 
case of a corporation, partnership, or association, by delivering it to 
an officer, manager, or general agent thereof, or to its attorney of 
record.


Sec. 13.60  Representation before the Bureau.

    An applicant or certificate holder may be represented by an 
attorney, certified public accountant, or other person recognized to 
practice before the Bureau of Alcohol, Tobacco and Firearms as provided 
in 31 CFR Part 8 (Practice Before the Bureau of Alcohol, Tobacco and 
Firearms), if he or she has otherwise complied with the applicable 
requirements of 26 CFR 601.521 through 601.527 (conference and practice 
requirements for alcohol, tobacco, and firearms activities).


Sec. 13.65  Computation of time.

    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 is 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. Papers or documents 
which are 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. 13.70  Extensions.

    For good cause shown, the Chief, Labeling Section, Product 
Compliance Branch, the Chief, Product Compliance Branch, or the Chief, 
Alcohol and Tobacco Programs Division, may grant extensions as to any 
time limits prescribed by the regulations in this part.
PART 19--DISTILLED SPIRITS PLANTS

    Par. 12. The authority citation for part 19 continues to read as 
follows:

    Authority: 19 U.S.C. 81c, 1311; 26 U.S.C. 5001, 5002, 5004-5006, 
5008, 5010, 5041, 5061, 5062, 5066, 5081, 5101, 5111-5113, 5142, 
5143, 5146, 5171-5173, 5175, 5176, 5178-5181, 5201-5204, 5206, 5207, 
5211-5215, 5221-5223, 5231, 5232, 5235, 5236, 5241-5243, 5271, 5273, 
5301, 5311-5313, 5362, 5370, 5373, 5501-5505, 5551-5555, 5559, 5561, 
5562, 5601, 5612, 5682, 6001, 6065, 6109, 6302, 6311, 6676, 6806, 
7011, 7510, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

    Par. 13. Section 19.633 is amended to add paragraph (c) to read as 
follows:


Sec. 19.633  Distinctive liquor bottles.

* * * * *
    (c) Cross reference. For procedures regarding issuance, denial and 
revocation of distinctive liquor bottle approvals, as well as appeal 
procedures, see part 13 of this chapter.

    Par. 14. Section 19.641 is revised to read as follows:


Sec. 19.641  Certificate of label approval or exemption.

    (a) Requirement. Proprietors are required by 27 CFR part 5 to 
obtain approval of labels, or exemption from label approval, for any 
label to be used on bottles of spirits for domestic use and shall 
exhibit evidence of label approval, or of exemption from label 
approval, on request of an ATF officer.
    (b) Cross reference. For procedures regarding the issuance, denial 
and revocation of certificates of label approval and certificates of 
exemption from label approval, as well as appeal procedures, see part 
13 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 
5201))

    Signed: July 26, 1995.
Daniel R. Black,
Acting Director.

    Approved: August 17, 1995.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 95-22577 Filed 9-12-95; 8:45 am]
BILLING CODE 4810-31-U