[Federal Register Volume 80, Number 152 (Friday, August 7, 2015)]
[Notices]
[Pages 47558-47561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-19456]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

[Docket No. TTB-2015-0012; Notice No. 156]


Importation of Distilled Spirits, Wine, Beer, Tobacco Products, 
Processed Tobacco, and Cigarette Papers and Tubes; Availability of 
Pilot Program and Filing Instructions To Test the Collection of Import 
Data for Implementation of the International Trade Data System

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Notice of availability and request for comments.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) is 
announcing a pilot program in which importers, Customs and Border 
Protection (CBP), and TTB will test, as part of the International Trade 
Data System (ITDS) project, the electronic collection of import data 
required by TTB and the transfer of that data through CBP to TTB. TTB 
is also announcing the availability of and requesting comment on a 
draft set of instructions that describes how importers of distilled 
spirits, wine, beer, tobacco products, processed tobacco, or cigarette 
papers and tubes may file information electronically to meet TTB 
requirements at the importation of those commodities. The information 
gathered through the comments on the draft instructions and pilot 
program and through an evaluation of the pilot program will allow TTB 
and CBP to refine their implementation of ITDS.

DATES: Comments on the draft Filing Instructions must be received by 
October 6, 2015.
    The pilot program will commence no earlier than August 19, 2015, 
and will continue until concluded by publication of a notice in the 
Federal Register ending the test. Pilot program participants should 
consult the following Web site to determine which ports are or will be 
operational for the test: http://www.cbp.gov/document/guidance/list-aceitds-pga-message-set-pilot-ports. Comments on the pilot will be 
accepted through the duration of the pilot.

ADDRESSES: Please send your comments on the draft Automated Commercial 
Environment Filing Instructions for TTB-Regulated Commodities and on 
the pilot program to one of the following addresses:
     http://www.regulations.gov (via the online comment form 
for this document as posted within Docket No. TTB-2015-0012 at 
Regulations.gov, the Federal e-rulemaking portal);
     U.S. Mail: Director, Regulations and Rulings Division, 
Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Box 12, 
Washington, DC 20005; or
     Hand delivery/courier in lieu of mail: Alcohol and Tobacco 
Tax and Trade Bureau, 1310 G Street NW., Suite 400, Washington, DC 
20005.
    See the Public Participation section of this document for specific 
instructions and requirements for submitting comments.

FOR FURTHER INFORMATION CONTACT: For information about the filing 
instructions or the pilot program, contact John Kyranos, Regulations 
and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G 
Street NW., Box 12, Washington, DC 20005; telephone (202) 453-1039, 
extension 001; or email [email protected].
    For technical questions related to the Automated Commercial 
Environment (ACE) or Automated Broker Interface (ABI) transmissions, 
contact Steven Zaccaro at [email protected].

SUPPLEMENTARY INFORMATION:

TTB Authority

    The Alcohol and Tobacco Tax and Trade Bureau (TTB) of the 
Department

[[Page 47559]]

of the Treasury regulates, among other things, the importation of 
distilled spirits, wine, and malt beverages pursuant to the Federal 
Alcohol Administration Act (FAA Act). TTB also administers the 
provisions of the Internal Revenue Code of 1986, as amended (IRC), with 
respect to the taxation of distilled spirits, wine, beer, tobacco 
products, processed tobacco, and cigarette papers and tubes. These 
statutory provisions are the basis of TTB regulations that require 
importers to submit certain information to U.S. Customs and Border 
Protection (CBP) upon importation.
    Section 103(a) of the FAA Act (27 U.S.C. 203(a)) requires that a 
person obtain a permit before engaging in certain activities related to 
distilled spirits, wine, and malt beverages, including importation. 
This section of the FAA Act states that it shall be unlawful, except 
pursuant to a ``basic permit'' issued by the Secretary of the Treasury 
(the Secretary), to engage in the business of importing into the United 
States distilled spirits, wine, or malt beverages. Section 103(a) of 
the FAA Act also states that it is unlawful, except pursuant to a basic 
permit, for any person so engaged to sell, offer or deliver for sale, 
contract to sell, or ship, in interstate or foreign commerce, directly 
or indirectly or through an affiliate, distilled spirits, wine, or malt 
beverages so imported. The terms ``distilled spirits'' and ``wine,'' 
when used in the context of the FAA Act, apply only to distilled 
spirits and wine for nonindustrial use.
    Additionally, section 105(e) of the FAA Act (27 U.S.C. 205(e)) 
authorizes the Secretary to prescribe regulations relating to the 
labeling of distilled spirits, wine, and malt beverages. With regard to 
imported commodities, the FAA Act provides that no person shall remove 
from customs custody, in bottles, for sale or any other commercial 
purpose, distilled spirits, wine, or malt beverages, without having 
obtained a certificate of label approval and being in possession of 
that certificate.
    Chapter 51 of the IRC pertains to the taxation and regulation of 
distilled spirits (including spirits used for both beverage and 
nonbeverage purposes), wines, and beer (see 26 U.S.C. chapter 51). The 
IRC imposes a Federal excise tax on all distilled spirits, wine, and 
beer manufactured in or imported into the United States. See, 
respectively, 26 U.S.C. 5001, 5041, and 5051. In general, the tax on 
imported distilled spirits, wine, and beer is collected by CBP, along 
with any import duties. The IRC at 26 U.S.C. 5232, 5364, and 5418 
provides for limited circumstances under which products may be 
withdrawn from customs custody without payment of tax for transfer to 
the bonded premises of an industry member regulated by TTB. These 
provisions cover distilled spirits imported in bulk and released from 
customs custody for transfer to a distilled spirits plant, natural wine 
(as defined in 26 U.S.C. 5381) imported in bulk and released from 
customs custody for transfer to a bonded wine cellar, and beer imported 
in bulk and released from customs custody for transfer to a brewery. 
Under these circumstances, the proprietor of the bonded premises 
becomes liable for the tax on the product withdrawn from customs 
custody upon its release from customs custody, and the applicable tax 
is collected by TTB when the product is removed from the distilled 
spirits plant, bonded wine cellar, or brewery, respectively. The IRC 
also contains provisions under which imported distilled spirits may be 
entered free of tax by the United States or any governmental agency of 
the United States for nonbeverage purposes. See 26 U.S.C. 5313. 
Furthermore, industrial alcohol may under certain circumstances be 
imported free of tax from the Virgin Islands to qualified industrial 
alcohol users. See 26 U.S.C. 5314(b).
    Chapter 52 of the IRC contains excise tax and related provisions 
pertaining to tobacco products and cigarette papers and tubes. Section 
5701 of the IRC (26 U.S.C. 5701) imposes Federal excise tax on such 
commodities manufactured in or imported into the United States. In 
general, the tax on imported tobacco products and cigarette papers and 
tubes is collected by CBP, along with any import duties. Under 26 
U.S.C. 5704, tobacco products and cigarette papers and tubes may be 
released from customs custody under certain conditions without payment 
of tax for delivery to the proprietor of an export warehouse or a 
manufacturer of tobacco products or cigarette papers and tubes. Upon 
removal from the manufacturer's premises, the tax on such products is 
collected by TTB.
    Chapter 52 of the IRC also contains provisions pertaining to the 
manufacture and importation of processed tobacco, which is not subject 
to tax. Section 5712 of the IRC (26 U.S.C. 5712) requires that 
importers of tobacco products or processed tobacco, before engaging in 
such business, apply for and obtain a permit.
    TTB administers the FAA Act and chapters 51 and 52 of the IRC 
pursuant to section 1111(d) of the Homeland Security Act of 2002, as 
codified at 6 U.S.C. 531(d). The Secretary has delegated various 
authorities through Treasury Department Order 120-01, dated December 
10, 2013, to the TTB Administrator to perform the functions and duties 
in the administration and enforcement of these provisions. 
Responsibility for collecting, accounting for, and depositing as 
internal revenue the excise taxes due incident to the importation of 
alcohol and tobacco products is vested by statute with the Secretary of 
the Treasury (see 6 U.S.C. 212), but has been delegated to the 
Secretary of Homeland Security and CBP. See Treasury Department Order 
100-16, 68 FR 28322 (May 23, 2003), and 6 U.S.C. 212 and 215(1).
    The TTB regulations at 27 CFR parts 1, 4, 5, and 7 set forth 
requirements related to certain FAA Act provisions. Section 1.20 (27 
CFR 1.20) repeats the FAA Act basic permit requirement for importers of 
distilled spirits, wine, and malt beverages. Parts 4, 5, and 7 require 
that, in order for an imported distilled spirit, wine, or malt beverage 
to be released from customs custody, a certificate of label approval 
must be ``deposited with the appropriate Customs officer at the port of 
entry.'' See 27 CFR 4.40, 5.51, and 7.31, respectively, regarding wine, 
distilled spirits, and malt beverages. Parts 4 and 5 also include 
several requirements related to certification of the origin and, in 
some cases, method of production of certain alcohol beverages by a 
foreign government. In general, certificates relating to origin or 
method of production are required to ``accompany'' the imported 
commodities. See 27 CFR 4.27, 4.45, and 5.52.
    The TTB regulations at 27 CFR part 27 set forth requirements 
related to the IRC provisions that apply to importations of distilled 
spirits, wine, and beer. One example of a requirement for which records 
must be filed with CBP is the importation of distilled spirits in bulk 
without payment of tax, which is subject to the requirements in 
subparts H and I of part 27. For such releases, the person importing 
the spirits must prepare a record of information that is given to the 
customs officer upon release of the spirits from customs custody. Part 
27 also includes requirements to submit information for transfers of 
distilled spirits without payment of tax from customs custody to a 
distilled spirits plant (27 CFR 27.172) and for imports of distilled 
spirits free of tax for use of a government agency (27 CFR 27.183).
    The TTB regulations at 27 CFR part 26 address distilled spirits, 
wine, and beer brought into the United States from

[[Page 47560]]

Puerto Rico or the Virgin Islands and contain provisions similar to 
those in part 27, as well as requirements associated with tax-free 
shipments to industrial alcohol users (27 CFR 26.292). (Note: As 
provided in 19 CFR 101.1, Puerto Rico is within the customs territory 
of the United States; the Virgin Islands is not. As described below, 
this notice addresses a document and pilot program related to the 
electronic filing of import information with CBP. Because shipments 
into the United States from Puerto Rico are not treated as imports by 
CBP, such shipments are not covered by this initiative.)
    The TTB regulations at 27 CFR part 41 address the importation of 
tobacco products, processed tobacco, and cigarette papers and tubes. In 
that part, Sec.  41.81 requires certain information to be submitted to 
CBP regarding imported tobacco products or cigarette papers or tubes, 
and Sec.  41.86 requires information to be submitted using a specified 
form in order for tobacco products or cigarette papers and tubes 
imported and released without payment of tax to be delivered to a 
specified TTB-permitted manufacturer or export warehouse proprietor.

Electronic Submission of TTB-Required Information to CBP

    On March 27, 2014, TTB published in the Federal Register (79 FR 
17029) a direct final rule, T.D. TTB-119, that among other amendments 
added a new section to 27 CFR part 73. Part 73 addresses the electronic 
submission of forms and electronic signatures. The new section, 27 CFR 
73.40, provides that a regulated entity may satisfy any requirement in 
the TTB regulations to submit a form to another agency by submitting 
the form to the agency by electronic means, as long as the agency 
provides for, and authorizes, the electronic submission of the form and 
any registration and other requirements to use the electronic 
submission functionality are met. In part 73, the term ``form'' 
includes all documents required to be submitted.

The International Trade Data System

    The International Trade Data System (ITDS) is an interagency 
program to establish a single electronic access point (or ``single 
window'') through which importers and exporters may submit the data 
required by Federal government agencies for international trade 
transactions. The Security and Accountability for Every Port Act of 
2006 (SAFE Port Act, Pub L. 109-347) mandated participation in ITDS for 
all agencies that require documentation for clearing or licensing the 
importation and exportation of cargo. The purpose of ITDS is to 
eliminate redundant information requirements, to efficiently regulate 
the flow of commerce, and to effectively enforce laws and regulations 
relating to international trade, by establishing a single portal 
system, operated by CBP, for the collection and distribution of 
standard electronic import and export data required by all 
participating Federal agencies. TTB is one of the Partner Government 
Agencies (PGAs) working with CBP to implement ITDS.
    The ``single window'' utilizes the Automated Commercial Environment 
(ACE), which is maintained by CBP. ACE allows importers and exporters 
to enter one set of data for each consignment of imported or exported 
articles. Currently, importers and exporters that are regulated by 
multiple agencies or that import or export commodities regulated by 
multiple agencies must submit data to those agencies through various 
channels, often in paper form. Through the implementation of ITDS, data 
will be entered into ACE and then made available to each government 
agency.
    The PGA Message Set defines the agency-specific information that 
importers will submit directly through the Automated Broker Interface 
(ABI), which transfers data into ACE as part of the CBP entry process. 
After the importer submits the data, it will be available to TTB, along 
with certain other data collected through the ABI filing.

Executive Order--Streamlining the Export/Import Process for America's 
Businesses

    On February 19, 2014, the President issued Executive Order 13659, 
``Streamlining the Export/Import Process for America's Businesses.'' 
\1\ The Executive Order mandated that ITDS be operational by December 
31, 2016. It also directed Federal agencies that use ITDS to review 
their existing regulations for the import and export of goods to 
determine whether those regulations need to be modified to implement 
ITDS and further improve and streamline existing processes for import 
and export, and if so, to initiate rulemaking to implement those 
modifications.
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    \1\ See http://www.whitehouse.gov/the-press-office/2014/02/19/executive-order-streamlining-exportimport-process-america-s-businesses.
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ITDS Pilot Program

    TTB intends to initiate a pilot program beginning no earlier than 
August 19, 2015, to test the electronic collection and transfer of data 
from importers through CBP to TTB. Instead of submitting the paper 
forms and documents currently required in TTB's regulations, 
participating U.S. importers and brokers will follow the draft ACE 
Filing Instructions for TTB-Regulated Commodities (Filing 
Instructions), described below, and use the PGA Message Set to send 
TTB-specific data elements and electronic images through ABI to ACE for 
review by TTB. The specific data elements are outlined in the draft 
Filing Instructions. TTB anticipates that this pilot program will help 
TTB and importers prepare for an efficient transition to ACE.
    To be eligible to apply for this pilot, importers must have the 
ability to file ACE entry summaries and ACE cargo release, and must 
file entries for TTB-regulated commodities. All pilot program 
participants are required to use a software program that has completed 
ACE certification testing for the PGA Message Set.
    Upon commencement of this test, a limited number of ports of entry 
will be accepting PGA Message Set data. A list of those ports and the 
dates they become operational is provided on the following CBP Web 
site: http://www.cbp.gov/document/guidance/list-aceitds-pga-message-set-pilot-ports. CBP may expand the pilot functionality to additional 
ports in the future. Test participants and interested parties should 
consult the above-referenced Web site for changes or additions to the 
list of ports. Importers must import articles regulated by TTB through 
a listed port in order to participate in the pilot program.
    As discussed earlier, TTB's import regulations currently require 
importers to submit to CBP various forms and documents in paper format. 
Importers who are accepted for participation in the pilot program will 
be supplying information electronically in accordance with the Filing 
Instructions. TTB will consider pilot program participants who follow 
the Filing Instructions to be in compliance with the current 
requirements to submit paper documents. TTB will provide further 
details in its approval letters to accepted applicants.
    The PGA Message Set that will be used in the pilot program 
incorporates requirements that will be published in a future issue of 
the Federal Register as a notice of proposed rulemaking, with a 
solicitation for public comment. (The notice of proposed rulemaking 
will propose amendments to the regulations both to accommodate the use 
of ITDS and to improve TTB's overall import processes, pursuant to the 
Executive Order discussed above.) The final PGA

[[Page 47561]]

Message Set used for importation of TTB-regulated commodities will be 
consistent with the TTB regulations established for those commodities.
    To apply to participate in the pilot program, please contact John 
Kyranos, Regulations and Rulings Division, Alcohol and Tobacco Tax and 
Trade Bureau, 1310 G Street NW., Box 12, Washington, DC 20005; 
telephone (202) 453-2265, extension 001; or email [email protected]. 
For technical questions related to the Automated Commercial Environment 
(ACE) or Automated Broker Interface (ABI) transmissions, contact Steven 
Zaccaro at [email protected].
    Please note that acceptance into the pilot program is based on the 
eligibility of the participant, along with TTB's need to include a 
broad cross-section of importers of the commodities regulated by TTB in 
order to evaluate the effectiveness of the system. In addition, 
participants may have different start dates.

Draft Filing Instructions Available for Comment

    To facilitate implementation of ITDS and ACE for importers of 
alcohol and tobacco products, TTB is making available for review and 
comment a draft document containing instructions for importers of TTB-
regulated articles on how to use the new system.
    The draft ACE Filing Instructions for TTB-Regulated Commodities 
document made available via this notice is intended to provide a 
framework for discussion, review, and comment, in order to aid the 
system development. The draft Filing Instructions document also 
reflects requirements that TTB may propose through the future 
publication in the Federal Register of a notice of proposed rulemaking, 
with a solicitation for public comment. The comments TTB receives on 
that notice of proposed rulemaking, as well as the comments received on 
the draft Filing Instructions themselves through this notice, may 
result in changes to the Filing Instructions.
    The draft Filing Instructions are available on Regulations.gov as 
part of Docket No. TTB-2015-0012 on Regulations.gov. You can also 
obtain a copy by contacting John Kyranos as described above.

Public Participation

Comments Invited

    TTB invites comments from interested members of the public on the 
draft Filing Instructions. TTB is particularly interested in comments 
related to the usability of the Filing Instructions. TTB will also 
accept comments regarding the pilot program through the duration of the 
test.

Submitting Comments

    You may submit comments on the Filing Instructions or on the pilot 
program by using one of the following three methods:
     Federal e-Rulemaking Portal: You may send comments via the 
online comment form posted with this notice within Docket No. TTB-2015-
0012 on Regulations.gov, the Federal e-rulemaking portal, at http://www.regulations.gov. A direct link to that docket is available under 
Notice No. 156 on the TTB Web site at http://www.ttb.gov/rrd/fedreg-misc.shtml. Supplemental files may be attached to comments submitted 
via Regulations.gov. For complete instructions on how to use 
Regulations.gov, visit the site and click on the ``Help'' tab.
     U.S. Mail: You may send comments via postal mail to the 
Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and 
Trade Bureau, 1310 G Street NW., Box 12, Washington, DC 20005.
     Hand Delivery/Courier: You may hand-carry your comments or 
have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 
1310 G Street NW., Suite 400, Washington, DC 20005.
    Please submit your comments by the closing date shown above in this 
notice. Your comments must reference Notice No. 156 and include your 
name and mailing address. Your comments also must be made in English, 
be legible, and be written in language acceptable for public 
disclosure. TTB does not acknowledge receipt of comments, and TTB 
considers all comments as originals.
    In your comment, please clearly state if you are commenting for 
yourself or on behalf of an association, business, or other entity. If 
you are commenting on behalf of an entity, your comment must include 
the entity's name as well as your name and position title. In your 
comment via Regulations.gov, please enter the entity's name in the 
``Organization'' blank of the online comment form. If you comment via 
postal mail or hand delivery/courier, please submit your entity's 
comment on letterhead.

Confidentiality

    All submitted comments and attachments are part of the public 
record and subject to disclosure. Do not enclose any material in your 
comments that you consider to be confidential or inappropriate for 
public disclosure.

Public Disclosure

    TTB will post, and you may view, copies of this notice, the Filing 
Instructions, and any online or mailed comments received about this 
proposal within Docket No. TTB-2015-0012 on the Federal e-rulemaking 
portal, Regulations.gov, at http://www.regulations.gov. A direct link 
to that docket is available on the TTB Web site at http://www.ttb.gov/rrd/fedreg-misc.shtm under Notice No. 156. You may also reach the 
relevant docket through the Regulations.gov search page at http://www.regulations.gov. For information on how to use Regulations.gov, 
click on the site's ``Help'' tab.
    All posted comments will display the commenter's name, organization 
(if any), city, and State, and, in the case of mailed comments, all 
address information, including email addresses. TTB may omit voluminous 
attachments or material that the Bureau considers unsuitable for 
posting.
    You may also view copies of this notice, the Filing Instructions, 
and any electronic or mailed comments that TTB receives about this 
proposal by appointment at the TTB Information Resource Center, 1310 G 
Street NW., Washington, DC 20005. You may also obtain copies at 20 
cents per 8.5- x 11-inch page. Contact TTB's information specialist at 
the above address or by telephone at 202-453-2270 to schedule an 
appointment or to request copies of comments or other materials.

Drafting Information

    Andrew Malone of the Regulations and Rulings Division drafted this 
notice.

    Signed: July 30, 2015.
John J. Manfreda,
Administrator.
[FR Doc. 2015-19456 Filed 8-6-15; 8:45 am]
BILLING CODE 4810-31-P