[Federal Register Volume 64, Number 245 (Wednesday, December 22, 1999)]
[Rules and Regulations]
[Pages 71918-71926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32598]



[[Page 71917]]

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Part IV





Department of the Treasury





_______________________________________________________________________



Bureau of Alcohol, Tobacco and Firearms



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27 CFR Part 200, et al.



Implementation of Public Law 105-33, Section 9302, Relating to Tobacco 
Importation Restrictions, Markings, Minimum Manufacturing Requirements, 
and Penalty Provisions, etc.; Final and Proposed Rules

  Federal Register / Vol. 64, No. 245 / Wednesday, December 22, 1999 / 
Rules and Regulations  

[[Page 71918]]



DEPARTMENT OF THE TREASURY

Bureau of Alcohol, Tobacco and Firearms

27 CFR Parts 200, 270, 275 and 290

[T.D. ATF-421]
RIN 1512-AB99


Implementation of Public Law 105-33, Section 9302, Relating to 
Tobacco Importation Restrictions, Markings, Minimum Manufacturing 
Requirements, and Penalty Provisions (98R-369P)

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

ACTION: Temporary rule (Treasury decision).

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SUMMARY: This temporary rule implements several provisions of the 
Balanced Budget Act of 1997. Section 9302 of the new law: places 
restrictions on the importation of previously exported tobacco 
products, requires markings on tobacco products or cigarette papers and 
tubes removed or transferred without payment of the federal excise tax, 
provides penalties for selling, relanding, or receiving, within the 
jurisdiction of the United States, tobacco products or cigarette papers 
and tubes which have been labeled and shipped for exportation and were 
removed after the effective date, and authorizes the Secretary to 
prescribe minimum capacity or activity requirements as a criteria for 
issuance of a manufacturer's permit.
    The temporary rule implements these changes in law by providing new 
and amended regulations in parts 200, 270, 275 and 290 of title 27 of 
the Code of Federal Regulations (CFR). Additionally, the Bureau of 
Alcohol, Tobacco and Firearms (ATF) has made several other clarifying 
changes to the tobacco regulations. This temporary rule will remain in 
effect until superseded by final regulations.
    In the Proposed Rules section of this Federal Register, ATF is also 
issuing a notice of proposed rulemaking that invites comments on this 
temporary rule for a 60-day period following the publication of this 
temporary rule.

DATES: These temporary regulations are effective January 1, 2000.

FOR FURTHER INFORMATION CONTACT: Ms. Teri Byers or Mr. Daniel Hiland, 
Regulations Division, 650 Massachusetts Avenue, NW, Washington, DC 
20226; Telephone (202) 927-8210, or alcohol/
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    This temporary rule implements several provisions in section 9302 
of the Balanced Budget Act of 1997 (Act), Pub. L. 105-33, 111 Stat. 
672. Section 9302 amends the Internal Revenue Code of 1986 (IRC) at 
sections 5704(b), 5712, 5754 and 5761(c). These new provisions relate 
to tobacco products, cigarette papers and tubes importation 
restrictions, markings, minimum manufacturing requirements and penalty 
provisions concerning tobacco products, and cigarette papers and tubes.
    Congress amended the IRC so that the Secretary of the Treasury can 
more effectively enforce the collection of Federal excise taxes on such 
products. These provisions protect the Federal excise tax revenues 
derived from tobacco products, and cigarette papers and tubes. The 
Joint Committee on Taxation's ``General Explanation of Tax Legislation 
Enacted in 1997'' stated that the purpose of the amendments was to 
impose ``expanded compliance measures designed to prevent the diversion 
of non-taxpaid tobacco products nominally destined for export to use 
within the United States.'' As the delegate of the Secretary of the 
Treasury (See Treasury Department Order 120-01 (formerly 221), dated 
June 6, 1972) ATF is implementing these new provisions by regulation.

Marks, Labels and Notices

Current Law

    The Federal excise tax on tobacco products, and cigarette papers 
and tubes is due on their removal from bonded premises. See 26 U.S.C. 
5703. There are several exemptions from the Federal excise tax, under 
section 5704. Section 5704(b) allows a manufacturer of tobacco 
products, cigarette papers or tubes, or an export warehouse proprietor 
to transfer tobacco products and cigarette papers and tubes, without 
payment of tax to the bonded premises of another manufacturer or export 
warehouse proprietor. As defined in section 5702, a manufacturer of 
tobacco products means any person who manufactures cigars, cigarettes, 
smokeless tobacco, or pipe tobacco. This term does not include a person 
who produces such products solely for the person's own consumption or 
use, or a proprietor of a customs bonded warehouse. A manufacturer of 
cigarette papers and tubes means a person who makes up cigarette paper 
and tubes, except for personal consumption. 26 U.S.C. 5702(h). An 
export warehouse proprietor means one who operates an export warehouse, 
which is a bonded internal revenue warehouse for the storage of tobacco 
products, and cigarette papers and tubes. See 26 U.S.C. 5702(i), (j).
    Section 5704(b) also allows a manufacturer of tobacco products, and 
cigarette papers and tubes, or an export warehouse proprietor to remove 
tobacco products, and cigarette papers and tubes 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. In addition, manufacturers 
may remove such articles for use of the United States without payment 
of the excise tax. Current ATF regulations which implement these 
provisions are located in 27 CFR part 290.
    Furthermore, under 26 U.S.C. 5723(b), ATF is authorized to require 
certain marks, labels and notices on every package of tobacco products 
or cigarette papers. Based on this authority, for those products that 
are intended for export, 27 CFR 290.185 requires that every package of 
tobacco product that is deemed for export be marked with the words 
``Tax-exempt. For use outside U.S.'' or the words, ``U.S. Tax-exempt. 
For use outside U.S.'' or a stamp, sticker or notice required by a 
foreign country or a possession of the United States, which identifies 
such country or possession. In addition, where taxpaid tobacco products 
are to be exported and a drawback of the tax paid to the manufacturer, 
27 CFR 290.222 requires these packages to be marked with the words, 
``For Export with Drawback of Tax''. These regulations serve two 
purposes. They enable us to clearly and easily identify packages of 
tobacco product that have been removed tax-free under section 5704(b) 
or subject to drawback under section 5706. In addition, the export 
marking requirement helps us to determine which tobacco products are 
intended for export. The regulations are a valuable enforcement 
mechanism that helps to prevent jeopardy of the revenue, because we can 
easily determine which products have been exempt from taxation and 
intended for export. When we identify a package of tobacco product in 
the U.S. market with tax-exempt export markings, we become concerned as 
to whether it has been Federally taxpaid.

New Law

    Congress specifically requires, under section 9302(h)(1)(A) of the 
Act, that tobacco products, and cigarette papers and tubes may not be 
transferred or removed under 26 U.S.C. 5704(b) unless they bear the 
proper marks, labels and

[[Page 71919]]

notices as required by the Secretary of the Treasury. Thus, the 
Secretary of the Treasury is authorized to prescribe the type of marks, 
labels and notices required on products that are exempt from taxation 
under 26 U.S.C. 5704(b). Congress wanted to specifically authorize ATF 
to determine, for products exempt from taxation under section 5704(b), 
required marks, labels and notices to ensure protection of the Federal 
excise tax revenue. Congress wanted to ensure that non-taxpaid products 
intended for exportation bear the proper markings. Congress also wanted 
to require that taxpaid products that are ultimately sold on the 
domestic market must not bear exportation markings. Allowing products 
with export markings on the domestic U.S. market would hinder ATF 
enforcement of lawfully due taxes, and cause confusion as to whether 
the product has been taxpaid.
    Thus, based on this authority, ATF has amended three sections of 
the regulations. We are now requiring that tobacco products, and 
cigarette papers and tubes bear the required marks, labels and notices 
in order to qualify for transfer or removal of the product without 
payment of tax. Accordingly, we have amended 27 CFR 270.233, 290.61 and 
290.181. Thus, under amended Sec. 270.233, tobacco products may not be 
transferred in bond unless they bear all required marks, labels and 
notices. In addition, under amended Sec. 290.61, tobacco products, and 
cigarette papers and tubes may not be removed for exportation without 
payment of tax unless they bear all required marks, labels and notices. 
We have also amended Sec. 290.181 to require that all tobacco products, 
cigarette papers and tubes must, before removal or transfer, bear the 
required marks, labels, or notices.
    Finally, we have amended Sec. 290.181 to clarify that the 
``package'', upon which the marking, labeling and notice requirements 
are to appear, does not include any cellophane wrapping material that 
may enclose a package. A package, thus, is only intended to include the 
actual material that holds and encloses the tobacco products, and 
cigarette papers or tubes. This amended definition clarifies placement 
of the marking, labeling and notice requirements. In keeping with 
Congressional intent to prevent diversion of tobacco products, we 
wanted to ensure that markings, labels and notices on products destined 
for export are clear and not easily destroyed.

Minimum Manufacturing Activity Requirements

Current Law

    Section 5712 currently requires that every person, before 
commencing business as a manufacturer of tobacco products or as an 
export warehouse proprietor, shall apply for and obtain a permit to 
engage in such business. See also 26 U.S.C. 5713. (Effective January 1, 
2000 importers will also be required to obtain a permit.) Under current 
law, the application may be rejected and the permit denied if, after 
notice and opportunity for hearing, we find that: (1) The proposed 
premises are not adequate to protect the revenue, (2) the applicant's 
business experience, financial standing or trade connections 
demonstrates that the applicant is not likely to comply with the law or 
(3) the applicant failed to disclose required material information or 
made a material false statement on the application. These factors 
enable ATF to ensure that those engaged in the business of 
manufacturing tobacco products will adequately protect the revenue and 
comply with the law and regulations.

New Law

    In section 9302 of the Act, Congress amended 26 U.S.C. 5712 by 
adding an additional factor for rejecting and denying an application 
for a permit. The new law provides that the an application may also be 
denied if ``the activity proposed to be carried out at such premises 
does not meet such minimum capacity or activity requirements as the 
Secretary may prescribe.'' Based on this new language, ATF is 
authorized to establish minimum capacity or activity requirements, and 
will deny a permit application based on a failure to meet such minimum 
capacity or activity requirements. Congress enacted this provision to 
ensure that those who apply for a permit actually intend to engage in 
the bona fide business of manufacturing tobacco products in a way that 
will adequately protect the revenue and comply with the law and 
regulations.
    In promulgating regulations that establish minimum capacity or 
activity requirements, ATF has considered several issues. ATF does not 
want to establish criteria that would effectively exclude small tobacco 
products manufacturers from obtaining a permit. In addition, ATF wants 
to establish criteria that will ensure that only those actually engaged 
in the business of manufacturing tobacco products are able to obtain a 
permit. Thus, ATF wants to establish criteria that would effectively 
exclude any persons who are not legitimate manufacturers and whose 
primary interest in obtaining a manufacturer's permit is to obtain the 
tax deferral benefits that a permit might facilitate.

Small Manufacturers

    Section 5712 requires that prior to engaging in the business of 
manufacturing tobacco products, a person must obtain a permit from ATF. 
We believe that any manufacturer who proposes to engage in the business 
of manufacturing of tobacco products, regardless of size, should be 
eligible to receive a permit, so long as they meet the definition of a 
manufacturer as defined in section 5702(d) and have fulfilled the other 
conditions in the law and regulations. In the past, ATF has issued 
permits to some small manufacturers of tobacco products, such as those 
who manufacture hand-rolled cigars. Thus, we did not want to establish 
minimum capacity or activity criteria that would exclude small tobacco 
products manufacturers.

Downstreaming of Taxes

    As stated, ATF needs to ensure that only those persons who fit 
within the definition of manufacturer at section 5702(d) are eligible 
to receive a permit. We would like to ensure that permits are not 
issued to persons who intend to use the permit to delay tax payment. In 
recent years, ATF has received inquiries from those who would like to 
obtain a permit and establish bonded premises for the primary purpose 
of receiving tobacco products in bond and delaying payment of Federal 
excise taxes.
    The Federal excise tax on tobacco products attaches to the products 
as soon as they are produced. The manufacturer is liable for the tax on 
tobacco products held in bond. The manufacturer actually pays the tax 
when the tobacco product is removed from bond. See 26 U.S.C. 5703. 
Generally, tobacco products are distributed under a three-tier 
distribution system. Once the manufacturer pays Federal excise tax 
after removal from bonded premises, the products are transferred to a 
wholesaler, which is the second level in the distribution system. The 
retailer is the third level in this tier system, and is a customer of 
the wholesaler.
    As discussed previously, section 5704 provides that tobacco 
products may be transferred from a manufacturer or export warehouse 
proprietor to another manufacturer or export warehouse proprietor 
without payment of tax. Because of this exemption from taxation, a 
business could attempt to set up one or more wholesale warehouses

[[Page 71920]]

with some de minimis production capability, and obtain a manufacturer's 
permit for each wholesale warehouse. Using the in bond transfer 
provision provided by section 5704, each warehouse would then be 
eligible to receive tobacco products in bond at each wholesale 
warehouse, without payment of the excise tax. The taxes on the product 
would not be due until the product was distributed from the wholesale 
level to the retail level. This approach is referred to as 
``downstreaming of taxes,'' since it moves the collection point for the 
excise tax from the production level to the wholesale level. This is 
potentially beneficial for manufacturers, since they can effectively 
delay taxpayment until the product is removed from essentially the 
wholesale level. At the same time, it has an adverse effect on Federal 
tax receipts, since it delays payment of the Federal excise tax.
    We would like to prevent the downstreaming of taxes. It undermines 
the effect and purpose of obtaining a permit to engage in the business 
of manufacturing tobacco products. It also contravenes the safeguards 
in obtaining a permit: to protect and collect the Federal excise tax 
revenue. ATF is also concerned with the potential number of new 
taxpayers (i.e., wholesalers qualifying as manufacturers) and the 
proliferation of tax payment points, if this approach becomes widely 
used. We have found that the collection of excise taxes is best 
achieved at the highest level within the distribution chain--the 
manufacturer level. Collected at the manufacturer level, we have fewer 
taxpayers to monitor, and thus have more efficient tax collections and 
fewer administrative costs. By ensuring that tax payment is made at the 
true manufacturing level, we can decrease the likelihood that taxable 
product will evade proper tax payment.
    Recognizing these concerns, ATF wants to ensure that the new 
minimum manufacturing criteria would prevent issuance of a permit to 
businesses that want to receive tobacco products in bond and delay 
Federal excise tax payments. In summary, we have amended the 
regulations whereby we will continue to issue permits to small 
manufacturers of tobacco products, despite limited production capacity, 
and to deny permits to persons who seek a permit for the principal 
purposes of receiving in-bond untaxed cigarettes.

Minimum Manufacturing Activity Criteria for Tobacco Products 
Manufacturers

    Accordingly, ATF has amended the regulations at 27 CFR 270.61, by 
requiring that a permit 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 proposed principal activity under such permit will be to 
receive or transfer non-taxpaid tobacco products in-bond. Furthermore, 
to qualify for a permit, the amount of tobacco products manufactured 
under a permit must exceed the amount transferred or received in-bond 
under such permit. For example, a person who only manufactures 1,000 
cigarettes per month, may receive a maximum of 999 cigarettes in bond 
during the month under that permit. Likewise, a person who manufactures 
10,000,000 cigarettes a month could receive up to 9,999,999 cigarettes 
in bond during the month under that permit. As stated, the quantity of 
tobacco products received or transferred in bond under a particular 
permit may not exceed the quantity of tobacco products manufactured 
under that permit for any given month.
    Again, this criteria is intended to ensure that only those persons, 
whose primary activity is the manufacture of tobacco products, receive 
a manufacturer's permit. We believe that these changes to the 
regulations effectively accommodate small producers, while protecting 
the timely assessment and collection of the Federal excise tax revenue. 
We have also amended regulations in 27 CFR 200.49b to include this new 
activity criterion as a basis for rejecting an application for a 
permit. We have not amended 27 CFR 200.46, regarding revocation or 
suspension of tobacco permits, because we already require compliance 
with regulations issued under the IRC.

Importers and Export Warehouse Proprietors

    Effective January 1, 2000, the IRC also requires that importers 
obtain a permit prior to engaging in the business. See 26 U.S.C. 5712. 
We have considered the issue very carefully, and have decided that we 
will not impose minimum capacity or activity criteria for importers at 
this time. In addition, we will not impose this type of requirement on 
export warehouse proprietors. We do not think that either of these 
permittees will, or can engage in possible similar misuse of their 
permits. However, ATF will consider imposing minimum manufacturing or 
activity criteria on importers and export warehouse proprietors if the 
need should arise.

Import Restrictions on Previously Exported Tobacco Products, 
Cigarette Papers and Tubes

    Section 9302 of the Act also added new section 26 U.S.C. 5754, 
entitled ``Restriction on importation of previously exported tobacco 
products.'' This new section places severe limitations on the 
conditions under which previously exported tobacco products, and 
cigarette papers and tubes may be imported or brought back into the 
United States. This new section states that such products may only be 
imported or brought into the United States as provided in section 
5704(d).
    Section 5704(d) allows previously exported tobacco products and 
cigarette papers and tubes to be released from Customs custody, without 
payment of tax, for transfer to a manufacturer of tobacco products or 
cigarette papers and tubes, or to the proprietor of an export 
warehouse. We note that section 5704(d) allows previously exported 
tobacco products to be lawfully transferred to any manufacturer of 
tobacco products or cigarette papers and tubes, or to any export 
warehouse proprietor. The law does not mandate that the previously 
exported products return to its original manufacturer or export 
warehouse proprietor.
    Thus, under section 5754, the only condition under which previously 
exported tobacco products and cigarette papers and tubes may be 
imported or brought into the United States is by release from Customs 
custody to a manufacturer or an export warehouse proprietor as an in-
bond transfer. New section 5754 precludes the importation and tax 
payment of such products by an importer. The law is very clear and 
leaves no discretion to ATF in this regard. Section 5754 clearly states 
that such products may only be imported or brought into the United 
States by the method provided in section 5704(d); that is, a transfer, 
without payment of tax, to a manufacturer or export warehouse.
    Based on the restrictive language of section 5754, ATF has amended 
several sections of the regulations in 27 CFR Part 275. Specifically, 
new or amended regulations now appear at 27 CFR 275.1, 275.81 and 
275.82.
    Under amended 27 CFR 275.1, the importation of tobacco products, 
and cigarette papers and tubes is generally discussed. In addition, 27 
CFR 275.81 distinguishes between tobacco products and cigarette papers 
and tubes that are imported, and those that have been previously 
exported from the United States and returned to the US. Furthermore, 27 
CFR 275.82 discusses

[[Page 71921]]

the new restrictions on the return of exported products.

Penalty and Forfeiture Provisions

    In addition to the above restrictions on importations, section 9302 
of the Act also imposes a new civil penalty on persons, other than 
manufacturers or export warehouse proprietors, who sell, reland or 
receive tobacco products or cigarette papers or tubes that have been 
labeled or shipped for exportation under Chapter 52 of the IRC. The 
civil penalty is the greater of $1,000 or five times the amount of tax 
imposed on the product. Thus, a larger penalty is imposed where the 
amount of the Federal excise tax on the product is greater than $200. 
In addition to the civil penalty, criminal penalties and forfeiture of 
the product and any vessel, vehicle or aircraft involved in relanding 
or removing such product may be imposed. See 26 U.S.C. 5761(c).

Exemptions

    The civil penalties do not apply to a manufacturer or export 
warehouse proprietor qualified under Chapter 52 of the IRC. See 26 
U.S.C. 5704(b), 5704(d).

Application of Effective Dates

    Section 9302(i) of the Act provides that the amendments to the IRC 
apply to ``articles removed'' after December 31, 1999. The Act amends 
the term ``removed'' to mean: ``the removal of tobacco products or 
cigarette papers or tubes from the factory or from internal revenue 
bond under section 5704, as the Secretary shall by regulation 
prescribe, or release from customs custody, and shall also include the 
smuggling or other unlawful importation of such article into the United 
States.''
    The new civil and forfeiture penalty in section 5761(c) applies 
only to tobacco products, and cigarette papers and tubes bearing export 
markings that have been ``removed'' on or after January 1, 2000. 
Accordingly, section 5761(c) applies to these products that are marked 
for export and removed from a manufacturer or export warehouse 
proprietor, released from Customs custody, or smuggled into the United 
States on or after January 1, 2000.
    Articles that are removed on or before December 31, 1999 are not 
subject to the new penalty in section 5761(c). Tobacco products in 
packages bearing export marks that were lawfully removed from Customs 
custody and entered into the United States prior to January 1, 2000 are 
lawful products and not subject to the civil penalty under section 
5761(c), or other criminal provisions of Chapter 52 of the IRC. These 
new penalty provisions have been added to 27 CFR 275.83.
    ATF has carefully considered ways to enforce section 5761(c), since 
the domestic market will contain tobacco products that have been 
lawfully removed on or before December 31, 1999, and products marked 
for export that have been unlawfully introduced into the domestic 
market after December 31, 1999 and subject to the civil penalty. To 
differentiate between the products that have been lawfully removed and 
unlawfully removed, we considered whether or not to change the export 
marking requirements under 27 CFR 290.185 for products manufactured 
after December 31, 1999. We have initially rejected this possibility, 
since it would impose major burdens on tobacco manufacturers. ATF has 
decided that voluntary commercial marks placed on packages by the 
tobacco industry will enable us to distinguish between these products. 
However, we will, under section 5704(b) authority, change the export 
marking on products manufactured after December 31, 1999 to 
differentiate between products removed if future investigations 
disclose the need to do so.

Repackaging

    As noted, Congress enacted a new section 5754 in the IRC. Under 
this section, tobacco products and cigarette papers and tubes 
previously exported from the United States may only be imported or 
brought into the United States as provided in section 5704(d). Section 
5704(d) provides that tobacco products and cigarette papers and tubes 
exported and returned may be released from customs custody, without 
payment of that part of the duty attributable to the internal revenue 
tax, for delivery to a manufacturer of tobacco products or cigarette 
papers and tubes or to an export warehouse proprietor. Except for a 
qualified manufacturer of tobacco products or cigarette papers and 
tubes and an export warehouse proprietor, section 5761(c) imposes 
penalties for the selling, relanding, and receiving of tobacco products 
that are labeled or shipped for export. In effect, section 5761(c) 
prohibits the sale of relanded tobacco product bearing export markings.
    Although manufacturers and export warehouse proprietors are 
authorized to receive relanded tobacco products or cigarette papers or 
tubes from customs custody without payment of the Federal excise tax, 
there are limitations on what manufacturers and export warehouse 
proprietors may do with such product. As discussed below, the products 
may be destroyed, re-exported, or in the case of a manufacturer, the 
product may be repackaged and removed for sale in the domestic market.

Export Warehouses

    Section 5702 defines ``export warehouse'' to mean ``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.'' An export warehouse proprietor is one who owns an 
export warehouse. Export warehouse proprietors are authorized to store 
non-taxpaid tobacco products, and cigarette papers and tubes for 
subsequent exportation. Under the IRC, an export warehouse proprietor 
is not authorized to pay excise tax on tobacco products, including 
relanded tobacco products for distribution into the domestic U.S. 
market. Export warehouses are specifically established under the law to 
facilitate the exportation of tobacco products without payment of the 
excise tax. Thus, by definition, an export warehouse can only receive 
tobacco products in bond and export them or return them to a 
manufacturer. Because there is no authority for the export warehouse 
proprietor to pay the excise tax and distribute tobacco products onto 
the domestic U.S. market, an export warehouse proprietor may lawfully 
receive relanded tobacco products, transfer relanded tobacco products 
to a qualified manufacturer, or re-export the relanded tobacco 
products. Export warehouse proprietors may also destroy these relanded 
tobacco products.

Manufacturers

    Manufacturers are authorized under the IRC to pay excise tax on and 
distribute tobacco products into the domestic market. See 26 U.S.C. 
5703. However, the IRC also requires that before removal from a 
manufacturer's factory, tobacco products must be put up in packages and 
bear the marks, labels, and notices required by the Secretary.
    As stated above, the Secretary has the general authority to 
prescribe packaging and marking requirements for tobacco products. See 
26 U.S.C. 5723(a) and (b). Under this authority, ATF has prescribed 
regulations under 27 CFR 290.185 which require that products removed 
for exportation exempt from taxation must bear export markings. Again, 
such markings include the words, ``Tax-exempt. For use outside of

[[Page 71922]]

U.S.'' or ``U.S. Tax-exempt. For use outside U.S.'' These export 
markings signify that the product is not subject to Federal taxes and 
that it is not intended for distribution within the United States. We 
rely on these markings to identify these products as a tax-exempt 
export for enforcement purposes. In addition, ATF has prescribed 
regulations under 27 CFR 290.222 which require that tobacco products 
and cigarette papers and tubes on which tax has been paid and a 
drawback claim has been made must have a label affixed reading ``For 
Export With Drawback of Tax.''
    However, previously exported products that are relanded in the 
United States also bear the export markings required under Sec. 290.185 
and Sec. 290.222 and may be intended for distribution in the domestic 
market. Because we cannot tell if a particular product on the market 
has been lawfully taxpaid and removed from Customs custody, or if it 
was smuggled into the U.S., the efficacy of the export marking 
requirements is severely reduced if these products are allowed in the 
domestic market. ATF has concluded that since relanded tobacco products 
are marked in accordance with the tobacco export regulations at 27 CFR 
290.185 and bear a statement that says ``Tax-exempt. For use outside of 
U.S.'' or ``U.S. Tax-exempt. For use outside U.S.'' or in accordance 
with 290.222 and bear a statement that says ``For Export With Drawback 
of Tax,'' they are not properly marked for distribution on the domestic 
U.S. market. Further, if products with export markings were allowed on 
the domestic market, this practice would hinder ATF enforcement of the 
IRC and pose a jeopardy of the revenue. Our goal is to protect the 
revenue, and to determine whether the Federal excise tax on a relanded 
product has been paid. ATF has considered various options for removing 
these export markings and bringing relanded products into compliance 
with the domestic marking and labeling requirements. We have considered 
allowing such products to be over-stamped, allowing the obliteration of 
the tax-exempt marking, or allowing stickers to be placed over the 
markings. However these options of over-stamping, obliteration or 
stickers would negate the value of these markings as a tax enforcement 
tool. Over-stamping, obliteration, or placing stickers over the tax-
exempt notice would not necessarily mean that the Federal excise tax 
had been paid on the relanded product. Any person could obtain product 
that had not been Federally taxpaid, and place stickers over the ``tax 
exempt'' notice on packages and distribute them in the domestic market.
    After careful consideration of the issue, we have concluded that a 
manufacturer who distributes relanded tobacco products onto the 
domestic market, must remove the product from its original packages 
(bearing export markings) and repackage them into new packages with the 
proper mark and notice requirements for domestic U.S. distribution as 
prescribed in 27 CFR part 270. ATF has determined that in order to 
protect the Federal excise tax revenue, it is essential to require the 
repackaging of these reimported products before they are introduced in 
domestic commerce.
    Thus, under 26 U.S.C. 5761(c), products labeled for export may not 
be sold on the domestic U.S. market. However, manufacturers are 
eligible to receive relanded tobacco products, and cigarette papers and 
tubes and sell them on the domestic market if they are completely 
repackaged under the laws and regulations for products not intended for 
exportation. Accordingly, amended 27 CFR 275.82(b) prescribes 
requirements for repackaging under these circumstances. Also, 
regulations have been added at 27 CFR 270.213 which notify 
manufacturers that tobacco products marked for export are not eligible 
for distribution on the domestic market, and the need to repackage such 
products.
    Finally, similar to an export warehouse proprietor, a manufacturer 
may also transfer the tobacco products to another manufacturer or 
export warehouse proprietor, re-export the relanded tobacco products, 
or destroy these relanded tobacco products.

Miscellaneous Changes

Form Numbers

    In addition to the changes to the regulations necessitated by 
Public Law 105-33, ATF is making several miscellaneous administrative 
changes that update the references to ATF Form numbers within the 
regulations. The regulations at 27 CFR 290.61a, 290.142, 290.198 
through 290.208, 290.210, 290.213, and 290.256 through 290.267 are also 
amended to change all references from the obsolete form number ATF F 
2149/2150, to the new form number ATF F 5200.14. The regulations in 27 
CFR 290.152 through 290.154 are also amended to change all references 
from the obsolete form number: ATF F 2635, to the new form number: ATF 
F 5620.8. The regulations in 27 CFR 290.62 are amended to delete 
obsolete references to a Customs form and regulatory citation.

Record Retention of ATF Forms

    Minor changes are being made in the regulations to reflect the 
correct number of years that ATF forms numbers 5700.14 and 5620.8 must 
be retained. The regulations are amended to change the records 
retention period from 2 years to 3 years.

Manufacturer's Record

    The record of a manufacturer of tobacco products at 27 CFR 270.183 
is amended to include the term ``roll-your-own tobacco'' and to include 
a record of transfers to, and receipts from foreign trade zones.

Export Warehouse Records

    The records required to be maintained by an export warehouse 
proprietor at 27 CFR 290.142 have been amended to include several new 
items of information. Proprietors will now be required to indicate the 
manufacturer and brand name of products: received, removed, 
transferred, destroyed, lost, or returned to manufacturers or customs 
bonded warehouses. In addition, their records must also include the 
number of containers and unit type (e.g., cartons, cases).

Definitions

    To clarify the regulations, several definitions are being added to 
the ``Meaning of terms'' sections in 27 CFR 275.11 and 290.11. Section 
275.11 is amended by adding definitions for the terms ``export 
warehouse,'' ``export warehouse proprietor,'' ``manufacturer of tobacco 
products,'' ``manufacturer of cigarette papers and tubes,'' and 
``relanding,'' Section 290.11 is amended by adding a definition for 
``zone restricted status.''

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required, the 
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do 
not apply. Moreover, any revenue effects of this rulemaking on small 
businesses flow directly from the underlying statute. Likewise, any 
secondary or incidental effects, and any reporting, recordkeeping, or 
other compliance burdens flow directly from the statute. Pursuant to 26 
U.S.C. 7805(f), this temporary regulation will be submitted to the 
Chief Counsel for Advocacy of the Small Business Administration for 
comment on its impact on small business.

[[Page 71923]]

Executive Order 12866

    It has been determined that this temporary rule is not a 
significant regulatory action as defined by Executive Order 12866 
because any economic effects flow directly from the underlying statute 
and not from this temporary rule. Therefore, a regulatory assessment is 
not required.

Paperwork Reduction Act

    This regulation is being issued without prior notice and public 
procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553). 
For this reason, the collection of information contained in this 
regulation has been reviewed under the requirements of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3507(j)), and pending receipt and 
evaluation of public comments, approved by the Office of Management and 
Budget (OMB) under control numbers 1512-0367 and 1512-0358. Any agency 
may not conduct or sponsor, and a person is not required to respond to, 
a collection of information unless it displays a valid control number 
assigned by OMB.
    The collection of information in this regulation is found in 27 CFR 
270.183 and 290.142. The collection of this information is required to 
verify that all tobacco products can be accounted for, thus ensuring 
that the tax revenue is protected. Without these recordkeeping 
requirements, no recording of the data elements pertaining to these 
operations would be prescribed.
    For further information concerning this collection of information, 
and where to submit comments on the collection of information, refer to 
the preamble of the cross-referenced notice of proposed rulemaking 
published in the proposed rules section of this Federal Register.

Administrative Procedure Act

    Because this document merely implements sections of the law which 
were enacted on August 5, 1997, and because immediate guidance is 
necessary to implement the provisions of the law, it is found to be 
contrary to the public interest and impracticable to issue this 
Treasury decision with notice and public procedure under 5 U.S.C. 
553(b), or subject to the effective date limitation in section 553(d).

Drafting Information

    The principal authors of this document are Ms. Teri Byers and Mr. 
Daniel Hiland, of the Regulations Division, Bureau of Alcohol, Tobacco 
and Firearms. However, other personnel within ATF and the Treasury 
Department also participated in developing this document.

List of Subjects

27 CFR Part 200

    Administrative practice and procedure, Authority delegations.

27 CFR Part 270

    Administrative practice and procedure, Authority delegations, 
Cigarette papers and tubes, Claims, Electronic fund transfer, Excise 
taxes, Labeling, Packaging and containers, Penalties, Reporting 
requirements, Seizures and forfeitures, Surety bonds, Tobacco products.

27 CFR Part 275

    Administrative practice and procedure, Authority delegations, 
Cigarette papers and tubes, Claims, Customs duties and inspection, 
Electronic fund transfer, Excise taxes, Imports, Labeling, Packaging 
and containers, Penalties, Reporting requirements, Seizures and 
forfeitures, Surety bonds, Tobacco products, U.S. possessions, 
Warehouses.

27 CFR Part 290

    Administrative practice and procedure, Aircraft, Authority 
delegations, Cigarette papers and tubes, Claims, Customs duties and 
inspection, Excise taxes, Exports, Foreign trade zones, Labeling, 
Packaging and containers, Penalties, Surety bonds, Tobacco products, 
Vessels, Warehouses.

Authority and Issuance

    Accordingly, title 27, Code of Federal Regulations is amended as 
follows:

PART 200--RULES OF PRACTICE IN PERMIT PROCEEDINGS

    Paragraph 1. The authority citation for part 200 continues to read 
as follows:

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

    Par 2. Section 200.49b is amended by redesignating paragraph (b) as 
paragraph (c) and by adding a new paragraph (b) to read as follows:


Sec. 200.49b  Applications for tobacco permits.

* * * * *
    (b) The applicant for a permit does not meet the minimum 
manufacturing and activity requirements in 27 CFR 270.61; or
* * * * *

PART 270--MANUFACTURE OF TOBACCO PRODUCTS

    Par 3. The authority citation for part 270 continues to read as 
follows:

    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.

    Par. 4. Section 270.61 is revised to read as follows:


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.
    Par. 5. Section 270.183 is revised to read as follows:


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);
    (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;

[[Page 71924]]

    (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)

    Par. 6. Section 270.213 is added to read as follows:


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 packages, marks and notices must conform to the requirements of 
this subpart.
    Par. 7. Section 270.233 is amended by adding a new sentence to the 
end of the section to read as follows:


Sec. 270.233  Transfer in bond.

    * * * 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.

PART 275--IMPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND 
TUBES

    Par. 8. The authority citation for part 275 is revised to read as 
follows:

    Authority: 26 U.S.C. 5701, 5703, 5704, 5705, 5708, 5722, 5723, 
5741, 5754, 5761, 5762, 5763, 6301, 6302, 6313, 6404, 7101, 7212, 
7342, 7606, 7652, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

    Par. 9. Section 275.1 is revised to read as follows:


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.
    Par. 10. Section 275.11 is amended by adding in alphabetical order, 
definitions for the terms ``Export warehouse,'' ``Export warehouse 
proprietor,'' ``Manufacturer of tobacco products,'' ``Manufacturer of 
cigarette papers and tubes,'' and ``Relanding'' to read as follows:


Sec. 275.11  Meaning of terms.

* * * * *
    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.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco. A manufacturer of tobacco products does not include:
    (1) A person who produces cigars, cigarettes, smokeless tobacco, 
pipe tobacco, or roll-your-own tobacco solely for the person's own 
personal consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Manufacturer of cigarette papers and tubes. Any person who makes up 
cigarette papers or cigarette tubes, except for personal use or 
consumption.
    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.
* * * * *
    Par. 11. Paragraph (a) of Sec. 275.81 is revised to read as 
follows:


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.
* * * * *
    Par. 12. Add Sec. 275.82 to subpart F after the undesignated center 
heading ``Release from Customs Custody * * *'' to read as follows:


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.
    Par. 13. Add Sec. 275.83 to subpart F after the undesignated center 
heading ``Release from Customs Custody of * * *'' to read as follows:

[[Page 71925]]

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 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.

PART 290--EXPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND 
TUBES, WITHOUT PAYMENT OF TAX, OR WITH DRAWBACK OF TAX

    Par. 14. The authority citation for part 290 is revised to read as 
follows:

    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.

    Par. 15. Section 290.11 is amended by adding, in alphabetical 
order, the definition of ``Zone restricted status'' to read as follows:


Sec. 290.11  Meaning of terms.

* * * * *
    Zone restricted status. Tobacco products, cigarettes papers and 
cigarette tubes which have been taken into a foreign trade zone from 
United States Customs territory for the sole purpose of exportation or 
storage until exported.
* * * * *
    Par. 16. Section 290.61 is revised to read as follows:


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.


Sec. 290.61a  [Amended]

    Par. 17. Section 290.61a is amended by removing the reference 
``Form 2149 or 2150'' and adding in its place the reference ``Form 
5200.14''.
    Par. 18. In Sec. 290.62 the fifth sentence and the seventh sentence 
of the section are amended to read as follows:


Sec. 290.62  Restriction on deliveries of tobacco products and 
cigarette papers and tubes to vessels and aircraft, as supplies.

    * * * 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. * * 
* 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).
* * * * *
    Par. 19. Section 290.142 is revised to read as follows:


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)


Sec. 290.143  [Amended]

    Par. 20. Section 290.143(b) is amended by removing the phrase ``2 
years'' and by adding in its place the phrase ``3 years''.


Sec. 290.147  [Amended]

    Par. 21. Section 290.147 is amended by removing the phrase ``2 
years'' and by adding in its place the phrase ``3 years''.


Sec. 290.152  [Amended]

    Par. 22. Section 290.152 is amended by removing the reference 
``Form 2635'' and add in its place the reference ``Form 5620.8''. 
Section 290.152 is also amended by removing the words ``two years'' and 
adding in its place the phrase ``3 years''.


Sec. 290.153  [Amended]

    Par. 23. Section 290.153 is amended by removing the reference to 
``Form 2635 (5620.8)'' and add in its place the reference ``Form 
5620.8''.


Sec. 290.154  [Amended]

    Par. 24. Section 290.154 is amended by removing the reference to 
``Form 2635 (5620.8)'' and add in its place the reference ``Form 
5620.8''. Section 290.154 is also amended by removing the phrase ``2 
years'' and by adding in its place the phrase ``3 years''.
    Par. 25. Section 290.181 is revised to read as follows:


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. 290.198  [Amended]

    Par. 26. Section 290.198 is amended by removing the references 
``Form 2149'' and ``Form 2150'' and adding in their place the reference 
``Form 5200.14''.

[[Page 71926]]

Sec. 290.199  [Amended]

    Par. 27. Section 290.199 is amended by removing the reference 
``Form 2149 or Form 2150'' and adding in their place the reference 
``Form 5200.14''. This section is also amended by removing the words 
``two years'' and adding in their place the words ``3 years''.


Sec. 290.200  [Amended]

    Par. 28. Section 290.200 is amended by removing the reference to 
``Form 2149 or 2150, as the case may be,'' and adding in its place the 
reference ``Form 5200.14''.


Sec. 290.201  [Amended]

    Par. 29. Section 290.201 is amended by removing the reference 
``Form 2150'' and adding in its place the reference ``Form 5200.14''. 
This section is also amended by removing the words ``two years'' and 
adding in their place the words ``3 years''.


Secs. 290.202 through 290.204  [Amended]

    Par. 30. Sections 290.202 through 290.204 are amended by removing 
the reference ``Form 2149 or Form 2150'' and adding in its place the 
reference ``Form 5200.14''.


Sec. 290.205  [Amended]

    Par. 31. Section 290.205 is amended by removing the reference 
``Form 2149/2150 (5200.14)'' wherever it appears in paragraphs (a)(1) 
and (d) and adding in its place the reference ``Form 5200.14''.


Sec. 290.206  [Amended]

    Par. 32. Section 290.206 is amended by removing the reference 
``Form 2149 or 2150'' and adding in its place the reference ``Form 
5200.14''.


Secs. 290.207 through 290.208  [Amended]

    Par. 33. Sections 290.207 through 206.208 are amended by removing 
the reference ``Form 2149 or 2150'' and adding in its place the 
reference ``Form 5200.14''.


Sec. 290.210  [Amended]

    Par. 34. Section 290.210 is amended by removing the reference 
``Form 2149 or 2150'' and adding in its place the reference ``Form 
5200.14''.


Sec. 290.213  [Amended]

    Par. 35. Section 290.213 is amended by removing the reference 
``Form 2150'' and adding in its place the reference ``Form 5200.14''.


Sec. 290.256  [Amended]

    Par. 36. Section 290.256 is amended by removing the reference 
``Form 2149'' and adding in its place ``Form 5200.14''.


Sec. 290.257  [Amended]

    Par. 37. Section 290.257 is amended by removing the reference 
``Form 2149'' and adding in its place ``Form 5200.14''. This section is 
also amended by removing the words ``two years'' and adding in their 
place the words ``3 years''.


Secs. 290.258 through 290.265  [Amended]

    Par. 38. Sections 290.258 through 290.265 are amended by removing 
the reference ``Form 2149'' each place it appears and adding in its 
place the reference ``Form 5200.14''.


Sec. 290.266  [Amended]

    Par. 39. Section 290.266 is amended by removing the reference 
``Form 2150'' and adding in its place ``Form 5200.14''. This section is 
also amended by removing the words ``two years'' and adding in their 
place the words ``3 years''.


Sec. 290.267  [Amended]

    Par. 40. Section 290.267 is amended by removing the reference 
``Form 2149'' and adding in its place ``Form 5200.14''. This section is 
also amended by removing the words ``two years'' and adding in their 
place the words ``3 years''.
    Signed: October 12, 1999.
John W. Magaw,
Director.

    Approved: November 17, 1999.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 99-32598 Filed 12-21-99; 8:45 am]
BILLING CODE 4810-31-U