[Federal Register Volume 81, Number 119 (Tuesday, June 21, 2016)]
[Proposed Rules]
[Pages 40404-40436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14359]
[[Page 40403]]
Vol. 81
Tuesday,
No. 119
June 21, 2016
Part II
Department of the Treasury
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Alcohol and Tobacco Tax and Trade Bureau
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27 CFR Parts 1, 4, 5, 7, et al.
Amendments To Streamline Importation of Distilled Spirits, Wine, Beer,
Malt Beverages, Tobacco Products, Processed Tobacco, and Cigarette
Papers and Tubes, and Facilitate Use of the International Trade Data
System; Proposed Rule
Federal Register / Vol. 81 , No. 119 / Tuesday, June 21, 2016 /
Proposed Rules
[[Page 40404]]
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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Parts 1, 4, 5, 7, 26, 27, and 41
[Docket No. TTB-2016-0004; Notice No. 159]
RIN 1513-AC15
Amendments To Streamline Importation of Distilled Spirits, Wine,
Beer, Malt Beverages, Tobacco Products, Processed Tobacco, and
Cigarette Papers and Tubes, and Facilitate Use of the International
Trade Data System
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this document, the Alcohol and Tobacco Tax and Trade Bureau
(TTB) proposes to amend its regulations governing the importation of
distilled spirits, wine, beer and malt beverages, tobacco products,
processed tobacco, and cigarette papers and tubes. The proposed
amendments are intended to clarify and streamline import procedures,
and support the implementation of the International Trade Data System
and the filing of import information electronically in conjunction with
an electronic import filing with U.S. Customs and Border Protection
(CBP). The proposed amendments include providing the option for
importers to file import-related data electronically when filing entry
or entry summary data electronically with CBP, as an alternative to the
current TTB requirements that importers submit paper documents to CBP
upon importation.
DATES: Comments must be received on or before August 22, 2016.
ADDRESSES: Please send your comments on this proposed rule to one of
the following addresses. Comments submitted by other methods, including
email, will not be accepted.
Internet: https://www.regulations.gov (via the online
comment form for this document as posted within Docket No. TTB-2016-
0004 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, and for
information on how to request a public hearing.
You may view copies of this document, selected supporting
materials, and any comments TTB receives about this proposal at https://www.regulations.gov within Docket No. TTB-2016-0004. A direct link to
this docket is posted on the TTB Web site at https://www.ttb.gov/regulations_laws/all_rulemaking.shtml under Notice No. 159. You also
may view copies of this document, all related supporting materials, and
any comments TTB receives about this proposal by appointment at the TTB
Information Resource Center, 1310 G Street NW., Washington, DC 20005.
Please call 202-453-2270 to make an appointment.
FOR FURTHER INFORMATION CONTACT: Karen Welch, 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 046.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
A. TTB Authority
B. The International Trade Data System
C. Executive Order--Streamlining the Export/Import Process for
America's
Businesses
D. Electronic Submission of TTB-Required Information to CBP
E. Relationship to Other Notices of Proposed Rulemaking
II. General Approach to Regulatory Amendments
III. Proposed Changes to the Regulations
A. Filing of the Basic Permit Number by Importers of Alcohol
Beverages
B. Filing of a COLA Identification Number or COLA Documents by
Importers of Alcohol Beverages
C. Removal of Requirement for Gin Statements of Process
D. Possession and Retention of Certificates of Age, Origin, or
Identity Issued by Foreign Governments for Importations of Certain
Wine and Distilled Spirits
E. Certification of Imported Vintage Wine
F. Possession of Certificates for Imported Natural Wine
G. Removal of Requirement To Present to CBP Certificates of
Nonstandard Fill for Wine and Distilled Spirits
H. Removal of Requirements Concerning Liquor Bottles and Filing
Certain Applications in Triplicate
I. Filing of Data With Respect to Distilled Spirits, Wine, and
Beer Imported or Brought Into the United States From the U.S. Virgin
Islands Subject to Tax
J. Entry of Distilled Spirits to Which an Effective Tax Rate or
Standard Effective Tax Rate Applies
K. Distilled Spirits, Wine, and Beer Imported or Brought Into
the United States Without Payment of Tax in Bulk Containers
L. Filing of Permit Number and Information for Industrial
Alcohol Shipments to the United States From the U.S. Virgin Islands
M. Filing of Permit Number and Data by Government Agencies
Importing Distilled Spirits Free of Tax
N. Certificate Covering Distilled Spirits, Wine, or Beer Brought
Into the United States From the U.S. Virgin Islands
O. Clarification of Record Retention Requirements
P. Removal of Requirements for CBP To Gauge or Inspect
Q. Filing of Data for Importation of Tobacco Products Subject to
Tax and Processed Tobacco
R. Filing of Data for Importation of Tobacco Products Without
Payment of Tax
S. Entry for Warehousing of Distilled Spirits, Wines, Beer,
Tobacco Products, and Cigarette Papers and Tubes
IV. Public Participation
A. Comments Invited
B. Submitting Comments
C. Confidentiality
D. Public Disclosure
V. Regulatory Analyses and Notices
A. Executive Order 12866
B. Regulatory Flexibility Act
C. Paperwork Reduction Act
VI. List of Subjects
VII. Amendments to the Regulations
I. Background
A. TTB Authority
The Alcohol and Tobacco Tax and Trade Bureau (TTB) of the
Department of the Treasury regulates, among other things, the
importation of distilled spirits, wine, and malt beverages \1\ 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,\2\ tobacco products, processed tobacco, and cigarette papers and
tubes. These statutory provisions are the basis of TTB
[[Page 40405]]
regulations that require importers to submit certain information upon
importation.
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\1\ The FAA Act defines ``malt beverage'' as ``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.'' See 27 U.S.C. 211(a)(7). Throughout this document,
the term ``malt beverage'' is used in reference to the FAA Act or
regulations promulgated thereunder.
\2\ The IRC defines ``beer'' as ``beer, ale, porter, stout, and
other similar fermented beverages (including sake or similar
products) of any name or description containing one-half of 1
percent or more of alcohol by volume, brewed or produced from malt,
wholly or in part, or from any substitute therefor.'' See 26 U.S.C.
5052(a). Throughout this document, the term ``beer'' is used in
reference to the IRC or regulations promulgated thereunder.
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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
packaging, marking, branding, labeling, and size and fill of containers
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 (COLA) and being in possession of that
COLA.
Chapter 51 of the IRC pertains to the taxation and regulation of
distilled spirits (including spirits used for both beverage and
nonbeverage purposes), wine, 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. Section 7652 (26 U.S.C.
7652) imposes a tax on distilled spirits, wine, and beer brought into
the United States from Puerto Rico and the U.S. Virgin Islands. The tax
is equal to the internal revenue tax imposed on like commodities
produced in the United States.
In general, the tax on distilled spirits, wine, and beer either
imported from foreign countries or brought into the United States from
the U.S. Virgin Islands is collected by CBP, along with any import
duties. Puerto Rico is within the customs territory of the United
States, and, as a result, shipments of such products from Puerto Rico
do not pass through customs custody when brought into the United
States. Furthermore, Puerto Rico is part of the United States for
purposes of the FAA Act. See 27 U.S.C. 211(a)(1). This proposed rule
primarily addresses amendments to the TTB regulations to facilitate the
electronic filing of information with CBP, and, as a result, distilled
spirits, wine, and beer brought into the United States from Puerto Rico
are not addressed in this document.
The IRC provides that, under limited circumstances, products may be
withdrawn from customs custody without payment of tax for transfer to
the bonded premises of an industry member regulated by TTB. Proprietors
of distilled spirits plants must apply for and receive notice of a
registration before commencing operations in the United States. See 26
U.S.C. 5171. Proprietors of bonded wine cellars must also apply for and
receive permission to operate before commencing operations in the
United States. See 26 U.S.C. 5351. Brewers must file a notice before
commencing business as a brewer in the United States. See 26 U.S.C.
5401. TTB assigns a registry number, referred to in this document as
the ``IRC registry number,'' to each such distilled spirits plant,
bonded wine cellar, and brewery at which operations are to be
conducted. The IRC registry number issued to distilled spirits plants
has been historically referred to as the ``distilled spirits plant
number.''
Under sections 5232, 5364, and 5418 of the IRC (26 U.S.C. 5232,
5364, and 5418), distilled spirits may be imported in bulk and released
from customs custody without payment of excise tax for transfer in bond
to a distilled spirits plant; natural wine (as defined in 26 U.S.C.
5381) may be imported in bulk and released from customs custody without
payment of excise tax for transfer in bond to a bonded wine cellar; and
beer may be imported in bulk and released from customs custody without
payment of excise tax for transfer in bond to a brewery. Under these
circumstances, the proprietor of the bonded premises becomes liable for
the tax on the product 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; 5314(b). Furthermore, industrial alcohol may under
certain circumstances be brought into the United States free of tax
from the U.S. Virgin Islands by 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. Section
7652 (26 U.S.C. 7652) imposes a tax on tobacco products and cigarette
papers and tubes brought into the United States from Puerto Rico and
the U.S. Virgin Islands. The tax is equal to the internal revenue tax
imposed on like commodities produced in the United States. Such
commodities brought into the United States from Puerto Rico are not
addressed in this document.
In general, the tax on tobacco products and cigarette papers and
tubes either imported from foreign countries or brought into the United
States from the U.S. Virgin Islands is collected by CBP, along with any
import duties. Under 26 U.S.C. 5704, imported tobacco products and
cigarette papers and tubes may be released from customs custody without
payment of tax for delivery to the proprietor of an export warehouse
\3\ or to a manufacturer of tobacco products or cigarette papers and
tubes if such commodities are not put up in packages, in accordance
with such regulations and under such bond as the Secretary shall
prescribe. See 26 U.S.C. 5704(c). Imported tobacco products and
cigarette papers and tubes previously exported and returned may be
released from customs custody without payment of tax for delivery to
the original manufacturer or to an export warehouse proprietor
authorized by such manufacturer to receive the commodities, in
accordance with such regulations and under such bond as the Secretary
shall prescribe. See 26 U.S.C. 5704(d).
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\3\ Under the IRC at 26 U.S.C. 5702(h), an export warehouse is a
bonded internal revenue warehouse for the storage of tobacco
products or cigarette papers or tubes or any processed tobacco, upon
which the internal revenue tax has not been paid, for subsequent
shipment to a foreign country, Puerto Rico, the U.S. Virgin Islands,
or a possession of the United States, or for consumption beyond the
jurisdiction of the internal revenue laws of the United States.
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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 businesses, apply for and obtain a permit.
TTB administers the FAA Act and chapters 51 and 52 of the IRC
pursuant
[[Page 40406]]
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
(superseding Treasury Department Order 120-01, dated January 24, 2003),
to the TTB Administrator to perform the functions and duties in the
administration and enforcement of these provisions. Responsibility for
collecting the excise taxes incident to the importation of distilled
spirits, wines, beer, tobacco products, and cigarette papers and tubes
is vested by statute with the Secretary of the Treasury. See 26 U.S.C.
7801. TTB regulations provide that such taxes are collected, accounted
for, and deposited as internal revenue collections by customs in
accordance with customs requirements. See 27 CFR 27.48 and 41.62. Under
the authority of the Homeland Security Act of 2002, see 6 U.S.C. 212
and 215(1), the Secretary has delegated these customs revenue functions
to the Secretary of Homeland Security. See Treasury Department Order
100-16, 68 FR 28322 (May 23, 2003).
TTB has authority under section 2(d) of the FAA Act, Pub. L. 74-401
(1935) ``to prescribe such rules and regulations as may be necessary to
carry out [its] powers and duties'' under the FAA Act. In addition, as
previously mentioned, section 105(e) of the FAA Act (27 U.S.C. 205(e)),
authorizes the Secretary of the Treasury to prescribe regulations for
the labeling of wine, distilled spirits, and malt beverages. Section
7805(a) of the IRC (26 U.S.C. 7805(a)) provides the general authority
to the Secretary to issue regulations to carry out the provisions of
the IRC.
The TTB regulations that implement the basic permit requirements of
the FAA Act are set forth in part 1 of title 27 of the Code of Federal
Regulations (27 CFR part I).
The TTB regulations that implement the labeling provisions of the
FAA Act, as they relate to wine, distilled spirits, and malt beverages,
are set forth in 27 CFR part 4, Labeling and Advertising of Wine (27
CFR part 4); 27 CFR part 5, Labeling and Advertising of Distilled
Spirits (27 CFR part 5); and 27 CFR part 7, Labeling and Advertising of
Malt Beverages (27 CFR part 7). For imported alcohol beverages
specifically, these regulations include several requirements related to
certification by a foreign government of the origin and, in some cases,
age, vintage date, or method of production of the alcohol beverage.
Regulations implementing the importation-related provisions of
chapter 51 of the IRC are found in 27 CFR part 27. Specifically, this
part contains procedural and substantive requirements that apply to the
importation of distilled spirits, wine, and beer into the United States
from foreign countries, including requirements related to recordkeeping
and reporting. Regulations implementing the IRC as it applies to
distilled spirits, wine, and beer brought into the United States from
Puerto Rico or the U.S. Virgin Islands are found in 27 CFR part 26.\4\
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\4\ 27 CFR part 26 also contains regulations applicable to
articles, which are generally defined in Sec. 26.11 as preparations
unfit for beverage use. Such articles are not within the scope of
this rulemaking.
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Regulations implementing the importation-related provisions of
chapter 52 of the IRC are found in 27 CFR part 41. Specifically, this
part governs the importation of tobacco products, cigarette papers and
tubes, and processed tobacco, including requirements related to
permits, recordkeeping, and reporting. Part 41 includes provisions
applicable to such commodities brought into the United States from
Puerto Rico or the U.S. Virgin Islands.
B. The International Trade Data System
The International Trade Data System (ITDS) is an interagency
program to establish an electronic ``single window'' through which
importers and exporters may submit electronically the data required by
Federal government agencies for clearing imports or exports. Section
405 of the Security and Accountability for Every Port Act of 2006 (SAFE
Port Act) (Pub. L. 109-347) mandates participation in ITDS by 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 window,
operated by CBP, for the collection and distribution of standard
electronic import and export data required by Federal agencies.
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 the Automated Commercial Environment (ACE) and then made
available to each government agency. The ``single window'' is intended
to streamline and harmonize data requirements, thereby reducing
compliance burdens on importers and exporters. Accordingly, TTB is
providing electronic filing options for the importation of commodities
regulated by TTB.
C. 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.''
\5\ The Executive Order mandated that agencies be able to utilize ITDS
by December 31, 2016. The Executive Order also directed Federal
agencies that use ITDS to review their existing regulations for the
import and export of goods to determine whether those regulations
should 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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\5\ See https://www.whitehouse.gov/the-press-office/2014/02/19/executive-order-streamlining-exportimport-process-america-s-businesses.
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D. Electronic Submission of TTB-Required Information to CBP
The TTB provisions applicable to imports include requirements that
importers submit information or documentation at importation to CBP.
That information can be submitted electronically pursuant to 27 CFR
73.40. That section 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 that other agency by electronic means, as
long as that 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 any documentation required to be submitted.
Section 73.40 was the result of amendments to the TTB regulations
published in the Federal Register (79 FR 17029) on March 27, 2014, as a
final rule, T.D. TTB-119, and it generally removes any regulatory
barrier to the submission of documents to CBP electronically. TTB is
issuing this document to propose changes to each of the TTB regulatory
sections that address the submission of information or documentation at
importation, in order to update TTB regulatory processes for imports
and provide a specific electronic filing option for the
[[Page 40407]]
submission of certain TTB information at importation using the Partner
Government Agency (PGA) Message Set. Technical instructions on the
submission of data using TTB's PGA Message Set, including the
formatting of TTB's PGA Message Set, are available in ``ACE Filing
Instructions for TTB-Regulated Commodities'' at Docket No. TTB-2016-
0004 on Regulations.gov. Importers may test the usability and
functionality of the TTB PGA Message Set through participation in a
pilot program announced by TTB in a Federal Register notice,
``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,'' (80
FR 47558, August 7, 2015).
TTB notes that under this proposed regulation, importers may elect
not to file any TTB data electronically.
E. Relationship to Other Notices of Proposed Rulemaking
In this rulemaking, TTB is proposing amendments to certain
regulations in 27 CFR parts 4, 5, and 7 to specifically accommodate
electronic filing. Interested parties should note that, as announced in
the Department of the Treasury's semiannual regulatory agenda
(available online at www.reginfo.gov), TTB plans to publish a notice of
proposed rulemaking titled ``Modernization of the Alcohol Beverage
Labeling and Advertising Regulations,'' in which TTB will propose
broader amendments to the regulations in 27 CFR parts 4, 5, and 7.
Interested parties should review and consider the proposals in each
document and comment accordingly.
II. General Approach to Regulatory Amendments
In a number of instances, the current TTB regulations refer to the
submission of paper documents (sometimes in triplicate) by importers to
obtain release of TTB-regulated products from customs custody. These
regulations were promulgated in the context of an environment in which
paper copies were the primary means of communicating to customs
officers that importers had met certain IRC or FAA Act requirements
that apply at importation. The paper documents communicate to CBP, for
example, that TTB had reviewed, and authorized the use of, a certain
label on an alcohol beverage and, as a result, the products bearing the
label were eligible for release from customs custody. Implementation of
ITDS provides another means for the communication of such information
to take place--via the submission and sharing of data electronically.
In general, the proposed regulations set forth new information
submission requirements to better support administration and
enforcement of the IRC and FAA Act with regard to imports, and require
information to be submitted and/or made available through one of the
following methods: (1) The electronic submission of TTB-required data
along with the submission of the customs entry or entry summary, as
appropriate; or (2) the retention and provision of information only
upon specific request by TTB or CBP.
With regard to electronic submissions of information, there are
generally two methods: Electronic submission of data directly and
electronic submission of documents as electronic images. In many
instances, TTB is proposing the former, that is, to provide importers
with the option to submit required information electronically rather
than to submit paper documents. The proposed regulations also allow for
the submission of certain paper documents through electronic means. In
circumstances in which the proposed regulations require that the
importer make the document available to TTB or CBP upon request, such
documents may be provided as an electronic image.
With regard to requests for documentation by TTB or CBP, the
proposed regulations generally refer to requests being made ``by the
appropriate TTB officer or a customs officer.'' The regulations
reference both TTB and CBP because, in general, CBP may request
information or documentation as part of the entry process, while TTB
may request information after release of the shipment from customs
custody to verify compliance with import requirements or as part of the
review of claims for refund or credit of tax. The term ``appropriate
TTB officer'' here refers to TTB officers who have been delegated the
TTB Administrator's authority through the issuance of a TTB Delegation
Order. There is a delegation order applicable to each part of the TTB
regulations that sets forth the ``appropriate TTB officer'' for each
reference in that part. The delegation orders are available on the TTB
Web site at https://www.ttb.gov. The term ``customs officer'' is
currently defined in parts 26, 27, and 41 of the TTB regulations, at 27
CFR 26.11, 27.11, and 41.11. TTB is proposing to update those
definitions. The proposed amendment would replace references in
Sec. Sec. 26.11 and 27.11 to ``the Customs Service'' with references
to U.S. Customs and Border Protection or CBP, where appropriate. The
proposed amendment would also remove references to the Secretary of the
Treasury as well as the reference in Sec. 41.11 to the Secretary of
Homeland Security. It would also remove the redundant references in
Sec. Sec. 26.11 and 27.11 to commissioned, warrant, and petty officers
of the Coast Guard because those officers are authorized by law to
perform the duties of a customs officer, and so are included in the
definition without being specifically named there. See 14 U.S.C. 143.
The proposed amendment would instead refer more broadly to ``any agent
or other person authorized by law to perform such duties.'' The
proposed regulations also include the addition of a definition of
``customs officer'' in parts 4, 5, and 7 (at 27 CFR 4.10, 5.11, and
7.10).
Finally, a number of current TTB regulations refer to CBP actions
and processes, such as CBP's release of a shipment upon receipt of
proper documentation or CBP's inspection of shipments and its notation
of information on TTB forms. In this document, TTB is proposing to
remove most references to actions that CBP will take at entry and
replace them with text that sets forth the requirements that apply to
importers at entry.
III. Proposed Changes to the Regulations
A. Filing of the Basic Permit Number by Importers of Alcohol Beverages
As noted previously, the FAA Act requires that an importer obtain a
basic permit to engage in the business of importing into the United
States distilled spirits, wine, or malt beverages, or 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. TTB issues these basic
permits.
Provisions addressing the FAA Act basic permit are set forth in the
TTB regulations in part 1. The permit requirement is restated in 27 CFR
1.20. Consistent with 27 U.S.C. 203, the regulations at 27 CFR 1.23
provide that the basic permit requirement does not apply to any agency
of a State or political subdivision thereof, or to any officer or
employee of any such agency. Section 1.58 (27 CFR 1.58) requires every
person receiving a basic permit to file the permit at the place of
business covered by the permit, so that it may be available to be
examined by the appropriate TTB officer.
The basic permit requirement is also cross-referenced in 27 CFR
part 27,
[[Page 40408]]
which generally sets forth the regulatory provisions that apply to the
importation of distilled spirits, wine, and beer from foreign countries
under the IRC. Section 27.55 of the TTB regulations (27 CFR 27.55)
restates the FAA Act basic permit requirement. Neither the regulations
in part 1 nor the regulations in part 27 currently state the conditions
under which an importer obtaining release of distilled spirits, wine,
or malt beverages subject to tax must provide the permit, or evidence
of having obtained the permit, to CBP during importation.
Each FAA Act basic permit that TTB issues has a number associated
with it. TTB is proposing to amend the regulations at Sec. 1.58 to
require that, if filing TTB data electronically, the importer file the
number of the FAA Act basic permit with CBP. Requiring the submission
of the permit number would allow the importer to demonstrate compliance
with the statutory requirement that it has obtained the required
permit. Amending the regulations to account for the submission of the
permit number also would make clearer to the importer what is required
upon importation of TTB-regulated alcohol beverages and make more
transparent and consistent the application of the permit requirement.
Finally, the filing of the permit number with the CBP entry would allow
TTB to more easily link imported alcohol beverages to their importers
and specific importations to the records importers keep and the reports
they submit to TTB. Revised Sec. 1.58 also provides that, regardless
of the method of filing, every importer must make the permit available
upon request by the appropriate TTB officer or a customs officer. With
regard to these regulatory sections, TTB also proposes to amend Sec.
27.55 to cross-reference Sec. 1.58 and to cross-reference 27 CFR 1.10
for the definitions of the terms ``distilled spirits,'' ``wine,'' and
``malt beverage'' that are particular to the FAA Act. The proposed
amendments also alert the reader to the FAA Act requirements to obtain
a COLA and any required foreign certificates. TTB also proposes to
clarify in Sec. 27.55 that FAA Act requirements do not apply to
tourists importing distilled spirits, wine, or malt beverages into the
United States for personal or other noncommercial use.\6\ Finally,
because there is currently no definition of ``malt beverage'' in part
1, TTB proposes to add the FAA Act definition to 27 CFR 1.10.
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\6\ In this document, as in the longstanding regulations in part
26, the term ``tourists'' is used to refer to any individuals who
are importing or bringing into the United States distilled spirits,
wine, or malt beverages for personal or other noncommercial use and
who are not subject to the FAA Act because they are not engaged in
the business of importing distilled spirits, wine, or malt beverages
and they are not removing such products from customs custody for
sale or any other commercial purpose.
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The FAA Act basic permit requirement is also reflected in 27 CFR
part 26, which contains regulations applicable to distilled spirits,
wine, and beer brought into the United States from Puerto Rico and the
U.S. Virgin Islands. With respect to the U.S. Virgin Islands, Sec.
26.202 of the TTB regulations (27 CFR 26.202), currently restates the
FAA Act basic permit requirement and provides that those to whom the
FAA Act basic permit requirement applies must ``file with the district
director of customs at the port of entry a certified or photostatic
copy'' of the permit.
TTB does not believe it is necessary to continue requiring the
submission of the paper form or a copy of the paper form as set forth
in Sec. 26.202. TTB believes that requiring the TTB-issued permit
number of the importer to be filed with CBP at the time of entry for
electronic filers will be sufficient to enable CBP to make the initial
determination that importers are compliant with the permit requirement
and to enable TTB to link the imported consignment with a specific
importer for purposes of verifying compliance. For importers that are
not filing electronically, TTB believes that the FAA Act basic permit
requirement can be enforced by requiring that a copy of the permit be
made available upon request. As a result, TTB is proposing to amend the
regulations at Sec. 26.202 to state that the FAA Act basic permit
number must be filed with the customs entry or made available upon
request, as required under Sec. 1.58. This change will reduce the
burden on persons bringing alcohol beverages into the United States
from the U.S. Virgin Islands who will no longer be required to submit a
copy of the permit. TTB is also removing references to ``the district
director of customs'' where they appear in the sections of part 26
pertaining to the U.S. Virgin Islands, replacing them with more general
references to customs or CBP.
TTB is also proposing to amend Sec. 26.202 to alert the reader to
the definitions of the terms ``distilled spirits,'' ``wine,'' and
``malt beverage'' that are particular to the FAA Act as well as to the
FAA Act requirements to obtain a COLA and any required foreign
certificates. TTB is also proposing to revise Sec. 26.202 to clarify
that no FAA Act requirement applies to tourists bringing distilled
spirits, wine, or malt beverages into the United States for personal or
other noncommercial use.
B. Filing of a COLA Identification Number or COLA Documents by
Importers of Alcohol Beverages
As noted above, section 105(e) of the FAA Act (27 U.S.C. 205(e))
sets forth labeling requirements and, with respect to imports, 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 and being in possession of a COLA
covering the distilled spirits, wine, or malt beverages and issued by
the Secretary of the Treasury.
To implement this requirement, Sec. Sec. 4.40, 5.51, and 7.31 of
the TTB regulations (27 CFR 4.40, 5.51, and 7.31) currently state that
no bottled wine, distilled spirits, or malt beverages, respectively,
shall be released from customs custody for consumption unless an
approved COLA covering the label of the product has been deposited with
the appropriate customs officer at the port of entry. With an approved
COLA, the brand or lot of wine, distilled spirits, or malt beverages
bearing labels identical to those appearing on the COLA may be released
from customs custody.
TTB believes it will not be necessary to require the importer to
deposit a paper copy of the approved COLA upon importation when filing
TTB data electronically. As is the case with the FAA Act basic permit,
each approved COLA has a number associated with it. Images of approved
COLAs can be accessed by entering the COLA identification number into
TTB's online database, the Public COLA Registry.\7\ Accordingly, TTB
proposes to amend Sec. Sec. 4.40, 5.51, and 7.31 to require that, upon
importation, the importer either file with the customs entry the TTB-
assigned identification number of the COLA, when filing electronically,
or provide a copy of the COLA to CBP. The proposed regulations also
provide that the bottles or containers must bear labels identical to
the labels appearing on the face of the COLA, or labels with changes
authorized by the COLA form.
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\7\ For the Public COLA Registry, see https://www.ttbonline.gov/colasonline/publicSearchColasBasic.do.
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In the proposed regulatory text, TTB has set forth the provisions
described here in one paragraph, paragraph (a), which will replace the
provisions currently set forth in paragraphs (a) and (b) of Sec. Sec.
4.40, 5.51, and 7.31. Proposed Sec. Sec. 4.40, 5.51, and 7.31 also
state that
[[Page 40409]]
importers must apply for and obtain a COLA before removing the bottled
wine, distilled spirits, or malt beverages from customs custody, and
cross-reference the limited exceptions to the COLA requirement that
appear in part 27.
COLA requirements applicable to alcohol beverages brought into the
United States from U.S. Virgin Islands are set forth in Sec. 26.202,
along with the FAA Act basic permit requirement discussed above.
Specifically, Sec. 26.202 states that every person and any agency of a
State or political subdivision thereof or any officer or employee of
such agency who brings liquors \8\ into the United States from the U.S.
Virgin Islands for nonindustrial use must file the COLA with ``the
district director of customs'' at the port of entry. TTB is proposing
to modify this requirement by adding the option to provide the TTB-
assigned identification number of the COLA with the electronic filing
of the CBP entry. Further, with regard to the format of the regulatory
text, Sec. 26.202 is currently organized as a single paragraph, with
the FAA Act basic permit and COLA requirements both described in one
sentence. TTB proposes to set forth the FAA Act basic permit and COLA
requirements in separate paragraphs, provide a paragraph alerting the
reader to the scope of the FAA Act, provide a paragraph to address
foreign certificates for certain wines and distilled spirits as
described below, and update the text to improve readability.
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\8\ The term ``liquors'' is used throughout part 26, and is
defined in Sec. 26.11 as ``industrial spirits, distilled spirits,
liqueurs, cordials and similar compounds, wines, and beer or any
alcoholic preparation fit for beverage use.''
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Additional regulations in parts 26 and 27 currently address
distinctive liquor bottles. Persons importing liquor bottles of
distinctive shape or design into the United States or bringing such
bottles into the United States from Puerto Rico or the U.S. Virgin
Islands, must obtain approval of the distinctive liquor bottle from TTB
by filing an application for label approval that includes a photograph
of the distinctive liquor bottle, and furnishing a copy of the COLA
along with the photograph of the distinctive liquor bottle ``to Customs
officials at each affected port of entry where the merchandise is
examined.'' \9\ See 27 CFR 26.314 and 27.204. TTB has determined that
the electronic filing of the TTB-assigned identification number for the
approved COLA through ACE or, when filing on paper, the provision of a
copy of the approved COLA to CBP at the time of entry without the
photograph is sufficient to regulate the importation of distinctive
liquor bottles. Accordingly, TTB proposes to amend Sec. Sec. 26.314
and 27.204 to remove the requirement in these sections that the COLA
and a photograph of the bottle be provided to CBP.
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\9\ The term ``liquor bottle'' is defined at 27 CFR 26.11 and
27.11 as 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 appropriate TTB officer to adequately protect the
revenue.''
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C. Removal of Requirement for Gin Statements of Process
In Part 5, Subpart F--Requirements for Withdrawal From Customs
Custody of Bottled Imported Distilled Spirits, paragraph (d) of Sec.
5.51 currently requires that TTB Form 5100.31 covering labels for
imported gin bearing the word ``distilled'' as a part of the
designation be accompanied by a statement prepared by the manufacturer
setting forth a step-by-step description of the manufacturing process.
This is the only regulation in part 5 that requires a formula for a
specific type of imported distilled spirits product. However, under
current TTB regulations at 27 CFR 5.33(g), a bottler or importer must,
upon request, submit to TTB a complete and accurate statement of the
contents of the bottles to which labels are to be or have been affixed.
Under this authority, TTB may continue to require industry members to
submit a formula, including a description of the manufacturing process,
for any alcohol beverage to TTB for evaluation prior to the issuance of
a COLA. TTB Industry Circular 2007-4, Pre-COLA Product Evaluation,
currently outlines these formula requirements.
In the proposed regulations, the requirement that TTB Form 5100.31
be accompanied by a statement of process as set forth in paragraph (d)
of Sec. 5.51 is removed, and the section is reorganized accordingly.
TTB will evaluate whether formulas for these products should continue
to be submitted, prior to the issuance of a COLA, through its authority
under Sec. 5.33(g).
D. Possession and Retention of Certificates of Age, Origin, or Identity
Issued by Foreign Governments for Importations of Certain Wine and
Distilled Spirits
Along with the COLA requirements discussed earlier, parts 4 and 5
of the current TTB regulations also contain certain requirements under
which importers must possess certifications by duly authorized
officials of foreign governments that the wines or distilled spirits
being imported have been produced using specific practices or in
conformity with certain laws of the country of origin in order for the
labels of those beverages to bear certain designations. Specifically:
Paragraph (a) of Sec. 4.45 (27 CFR 4.45(a)) addresses
certificates of origin and identity for wine and requires that the
invoice for certain imported wine be accompanied by a certificate
issued by a duly authorized official of the appropriate foreign
government certifying as to the identity of the wine and that the wine
has been produced in compliance with the laws of the respective foreign
government regulating the production of such wine for home consumption.
Without a required certificate, the wine will not be released from
customs custody.
Paragraphs (a) through (e) of Sec. 5.52 (27 CFR 5.52(a)-
(e)) set forth similarly worded certificate of origin requirements for
Scotch, Irish, and Canadian whiskies; brandy, Cognac, and rum; Tequila;
other whiskies; and other distilled spirits, respectively. The required
certificates must accompany the invoice or be filed with the
application for release (in the case of Tequila), or the spirits shall
not be released from customs custody. Generally, the certificates must
indicate that the spirit has been produced in compliance with the laws
of the country of origin regulating the manufacture of the specific
distilled spirits for home consumption. In some cases, the certificates
must also address production practices or age statements.
Section 5.56 (27 CFR 5.56) provides that distilled spirits
imported in bulk for bottling in the United States may not be removed
from the plant where bottled unless the bottler possesses certificates
of age and certificates of origin required under Sec. 5.52 for the
same spirits if imported in bottles.
The common element among these requirements is that the certificate
must generally accompany the wines or distilled spirits (or accompany
the invoice applicable to such wines or distilled spirits), except in
the case of bulk importations, where the U.S. bottler must possess the
certificate. TTB believes that, rather than require certificates of
age, origin, or identity for wine or distilled spirits imported in
bottles to be filed with CBP, the purposes of the requirement can be
met by requiring the importer to have the certificate in its
possession, to be made available upon request. The importer may be
required to attest to the possession of the certificate at importation.
TTB now has timely access to importation information through ACE and
has the specific expertise to determine whether a certificate of age,
[[Page 40410]]
origin, or identity is required for a certain product and whether a
certificate is valid. Under the proposal, TTB could, through post-
release review of the importation information, determine whether the
appropriate certificate of age, origin, or identity is in the
possession of the importer. This approach supports compliance in a way
that facilitates legitimate trade, expedites the release of compliant
wines and distilled spirits from customs custody, and allows
enforcement resources to be focused on identifying noncompliance.
Accordingly, TTB is proposing to amend Sec. Sec. 4.45(a), and
5.52(a) through (e), to state that products for which a certification
of age, origin, or identity is required are not eligible for release
from customs custody and no person may remove such products from
customs custody, unless the importer possesses the relevant certificate
(and accompanying invoice, if required). The proposed amendments are
for clarity only and do not change the intent of those regulations,
that is, that products requiring a certificate of age, origin, or
identity may not enter the United States for consumption unless covered
by such a certificate.
The revisions to Sec. 4.45(a) will also clarify that the
certificate must only be in the possession of the importer at the time
of removal from customs custody in the case of wine imported in
containers.
TTB is proposing to add a new Sec. 4.53 (new 27 CFR 4.53) to
subpart F, Requirements for Approval of Labels of Wine Domestically
Bottled or Packed, to provide that wine imported in bulk and bottled in
the United States may not be removed from the premises where bottled
unless the bottler possesses a certificate if a certificate is required
under Sec. 4.45 for like wine imported in containers. TTB is also
proposing editorial changes to current Sec. 5.56, pertaining to
certificates of age and origin for distilled spirits imported in bulk
for bottling in the United States.
In order to ensure that the required certificates are available for
TTB inspection, TTB is proposing in this document to add provisions in
the regulations at Sec. 5.56, in a new paragraph (c) in Sec. 4.45, in
new Sec. 4.53, and new paragraph (f) in Sec. 5.52 to address the
retention of the certificates addressed in those sections. Under new
paragraphs (c) in Sec. 4.45 and (f) in Sec. 5.52, for the five years
following importation, upon request by the appropriate TTB officer or a
customs officer, the importer must provide a copy of any certificate of
age, origin, or identity relied upon for removal of imported wine or
distilled spirits, as applicable, from customs custody. Similarly,
under new Sec. 4.53 and the revision to Sec. 5.56, for the five years
following the removal of bottled wine or distilled spirits from the
bonded wine cellar or distilled spirits plant where bottled, upon
request of the appropriate TTB officer, the U.S. bottler must provide a
copy of any certificate of age, origin, or identity required under
Sec. Sec. 4.45 or 5.52 for like wine or distilled spirits imported in
containers.
TTB believes that five years is a reasonable period of time for
record retention because there is a five-year statute of limitations
for criminal violations of the FAA Act. TTB notes that the proposed
rule does not require industry members to retain paper copies of each
certificate; they may retain electronic copies of certificates.
While the FAA Act does not contain any specific recordkeeping
requirements in this regard, the labeling regulations have for decades
required industry members to produce such certificates upon demand.
Furthermore, such records are necessary to enforce the requirements of
the FAA Act. See, e.g., National Confectioners Ass'n v. Califano, 569
F.2d 690, 693-94 (D.C. Cir. 1978), which upheld the U.S. Food and Drug
Administration's authority to require records in the absence of a
specific statutory requirement, where records were necessary to help in
the efficient enforcement of the Federal Food, Drug and Cosmetic Act.
Further, as noted above, TTB has authority under section 2(d) of the
FAA Act, Pub. L. 74-401 (1935) ``to prescribe such rules and
regulations as may be necessary to carry out [its] powers and duties''
under the FAA Act.
TTB is also proposing certain clarifications to Sec. Sec. 4.45 and
5.52. First, references to ``a duly authorized official'' of a foreign
government would be changed to ``an official duly authorized by'' the
appropriate foreign government. Many foreign governments authorize non-
governmental or quasi-governmental bodies (like the Consejo Regulador
del Tequila in Mexico or the Comit[eacute] Interprofessionnel du Vin de
Champagne in France) to issue such certificates for wines or distilled
spirits, and TTB's practice has been to accept certificates issued by
such organizations. Second, certain certification requirements in
Sec. Sec. 4.45(a) and 5.52(e) would be limited to instances when the
country of origin of imported wine or distilled spirits requires the
issuance of a certificate of age, origin, or identity, instead of when
the country of origin ``authorizes'' the issuance of such certificates.
This change conforms the regulations to TTB's practice.
E. Certification of Imported Vintage Wine
Section 4.27 (27 CFR 4.27) requires that wine labeled with the year
of harvest of the grapes, or vintage date, meet certain requirements.
Paragraph (c) of Sec. 4.27 currently states that imported wine may
bear a vintage date if, among other conditions, the invoice for such
wine is accompanied by a certificate issued by a duly authorized
official of the country of origin certifying that the wine meets
various criteria or, if imported in bulk for bottling in the United
States, the American bottler possesses such a certificate.
TTB believes that it is no longer necessary to require this
certificate. TTB's regulations do not impose a certification
requirement on imported wine labeled with an appellation of origin, and
TTB believes that a consistent approach is appropriate for vintage
wine.
Accordingly, TTB is proposing to amend paragraph (c) of Sec. 4.27
to remove the requirement that the importer or bottler of imported
vintage wine possess a certificate of vintage wine from the appropriate
foreign government. Instead, the proposed regulations require that,
upon request by the appropriate TTB officer or a customs officer, the
importer of the wine imported in bottles, or the domestic bottler of
wine imported in bulk and bottled in the United States, must be able to
demonstrate that the wine is entitled to be labeled with the vintage
date. The remaining requirements would be that the wine be of the
vintage shown, that the laws of the country regulate the appearance of
vintage dates on the labels of wine produced for consumption within the
country of origin, that the wine has been produced in conformity with
those laws, and that the wine would be entitled to bear the vintage
date if it had been sold within the country of origin.
F. Possession of Certificates for Imported Natural Wine
TTB proposes to add a definition of natural wine to Sec. 26.11 and
Sec. 27.11, applicable to all of parts 26 and 27. The proposed
definition of natural wine at Sec. 26.11 and Sec. 27.11 provides that
natural wine is made in accordance with a production practice or
procedure authorized for natural wine by 27 CFR part 24, or, in the
case of natural wine produced and imported subject to an international
agreement or treaty, those practices and procedures acceptable to the
United States under that agreement
[[Page 40411]]
or treaty. This is consistent with the requirements of 26 U.S.C.
5382(a)(3)(A).
TTB also proposes amending 27 CFR 27.140, which generally requires
importers of natural wine to obtain a certification regarding the
production of the wine from the country of origin. (This requirement
does not apply to natural wine brought into the United States from the
U.S. Virgin Islands.)
TTB proposes to amend Sec. 27.140 to remove the definition of
importer from paragraph (a) of that section. The existing regulatory
definition applies only to importers that are required to have a basic
permit under the FAA Act. Although the certificate is also required
under Sec. 4.45(b) for FAA Act purposes, the IRC requirement applies
to all importers of natural wine, including wine not subject to the FAA
Act. TTB proposes to amend paragraph (b)(1) of Sec. 27.140 to state
that the importer of bottled wine must be in possession of the
certificate at the time of filing the entry with CBP, and the bottler
of bulk wine must be in possession of the certificate at the time the
wine is withdrawn from the premises where bottled. Under proposed
27.140(b)(1), natural wine certificates must be retained for three
years following release from customs custody, and must be made
available to the appropriate TTB officer or a customs officer upon
request.
TTB also proposes a technical revision to the definition of proper
cellar treatment at Sec. 27.140(a), and proposes to remove the
definition of natural wine in Sec. 27.140 from that section. The
proposed definition is intended to describe which wine is eligible to
be imported or brought into the United States in bulk without payment
of tax, as described in more detail below.
For natural wine that is subject to the FAA Act, current Sec.
4.45(b) provides that the importer of bottled wine must be in
possession of the certificate at the time of the release of wine from
customs custody. Proposed Sec. 4.45(c) provides that the importer must
retain the certificate for five years following the date of removal
from customs custody, and proposed Sec. 4.53 provides that the bottler
of bulk wine must be in possession of the certificate at the time the
wine is removed from the premises where bottled and retain the
certificate for five years following such removal.
G. Removal of Requirement To Present to CBP Certificates of Nonstandard
Fill for Wine and Distilled Spirits
The TTB regulations in 27 CFR parts 4 and 5 currently prescribe
certain standards of fill for wine and distilled spirits, respectively.
(See 27 CFR 4.70-4.72 and 5.45-5.47a.) Over the years, a number of
changes were made to these standards, but the most significant change
was the adoption of metric standards of fill for wine containers in
1974 (in T.D. ATF-12, 39 FR 45216) and for distilled spirits containers
in 1980 (in T.D. ATF-25, 41 FR 10217 and 11022). A later amendment to
the metric standards for distilled spirits containers included a phase-
out of the 500-milliliter container size for distilled spirits (in T.D.
ATF-228, 51 FR 16167).
Wine and distilled spirits that were bottled or packed before these
standards became mandatory are ``grandfathered'' and may continue to be
marketed in the United States. Imported wine and distilled spirits must
either have (1) entered into customs custody before the most recent
standards became mandatory (January 1, 1979, for wine and January 1,
1980, for distilled spirits or July 1, 1989, in the case of distilled
spirits in 500-milliliter containers) and remained in their containers,
or (2) been bottled or packed before the most recent standards became
mandatory and a statement signed by a duly authorized official of the
appropriate foreign country attests to that fact.
Within part 4, subpart E, Requirements for Withdrawal of Wine From
Customs Custody, Sec. 4.46 (27 CFR 4.46) requires that imported wine
in containers not conforming to an authorized standard of fill (and not
entered into customs custody before January 1, 1979) be accompanied by
a certificate of nonstandard fill in order to be withdrawn from customs
custody. Within part 5, subpart F, Requirements for Withdrawal From
Customs Custody of Bottled Imported Distilled Spirits, Sec. 5.53 (27
CFR 5.53) similarly requires that imported distilled spirits in
containers not conforming to an authorized standard of fill (and not
entered into customs custody before January 1, 1980, or July 1, 1989,
in the case of distilled spirits in 500-milliliter containers) be
accompanied by the certificate of nonstandard fill as a requirement for
withdrawal from customs custody.
While importations of wine and distilled spirits that were bottled
or packed before the most recent standards became mandatory are rare,
TTB does occasionally receive COLA applications stating nonstandard
fill for wines and distilled spirits. Therefore, TTB believes that it
is appropriate to retain the exceptions for these products in the
regulations. However, because the certification of nonstandard fill is
provided as part of the COLA application, TTB believes it is not
necessary to require the certificate upon importation. Accordingly, TTB
proposes to remove Sec. Sec. 4.46 and 5.53 from the regulations, and
to insert the exceptions for the ``grandfathered'' wines and distilled
spirits--along with the requirement for the certificate of nonstandard
fill for wines not entered into customs custody before January 1, 1979
and distilled spirits not entered into customs custody before January
1, 1980 or July 1, 1989 in the case of distilled spirits in 500-
milliliter containers--into the general standards of fill regulations
in Sec. Sec. 4.70 and 5.45. As proposed, the required foreign
certificate is a document that must be made available to TTB upon
request. TTB also proposes to remove the cross reference to Sec. 5.53
currently contained in Sec. 5.47a (27 CFR 5.47a).
Finally, TTB is clarifying that the certificates are to be issued
by ``an official duly authorized by'' the appropriate foreign
government, to provide for non-governmental or quasi-governmental
bodies that may be authorized by a foreign government to issue such
certificates.
These proposals concerning standards of fill are only intended to
make changes to allow for the electronic filing of information.
Substantive changes to standards of fill requirements are not addressed
in this document.
H. Removal of Requirements Concerning Liquor Bottles and Filing Certain
Applications in Triplicate
Regulations in part 26 subpart P and part 27 subpart N concern
requirements for liquor bottles. Sections 26.316 and 27.206 (27 CFR
26.316 and 27.206) currently provide that a customs officer will deny
entry to any liquor bottle containing distilled spirits upon advice of
the appropriate TTB officer who deems the bottle to be deceptive.
Sections 26.318 and 27.208 (27 CFR 26.318 and 27.208) state that filled
liquor bottles not conforming to those regulations will be denied entry
into the United States, but provide that TTB may authorize such liquor
bottles to be brought into the United States upon a letterhead
application filed with TTB in triplicate. Similarly, sections 26.319
and 27.209 provide that TTB may authorize an importer to receive used
liquor bottles pursuant to regulations in 27 CFR part 31 upon a
letterhead application filed with TTB in triplicate. TTB proposes to
amend Sec. Sec. 26.316 and 27.206 to replace the text that states that
the customs officer will deny entry of disapproved liquor bottles with
text stating that disapproved bottles may not be brought into the
United States. These amendments reflect the current
[[Page 40412]]
environment where CBP may make decisions to inspect shipments on a
case-by-case basis. Additionally, as amended, Sec. 26.316 specifically
states its provisions apply to bottles both from Puerto Rico, which is
within the customs territory of the United States, and from the U.S.
Virgin Islands, which is not. TTB also proposes to amend Sec. Sec.
26.318, 26.319, 27.208, and 27.209 to remove the requirement that the
applications be made in triplicate. TTB also proposes to update a
cross-reference made in Sec. Sec. 26.319 and 27.209 from Sec. 31.263
(27 CFR 31.263) to Sec. 31.203 (27 CFR 31.203), and to make Sec. Sec.
26.318 and 27.208 more readable.
In addition, TTB is proposing to remove requirements set forth in
27 CFR 26.331 and 27.221 that applications to TTB for authorization to
use alternate methods or procedures in lieu of methods or procedures
prescribed by those parts be submitted in triplicate.
I. Filing of Data With Respect to Distilled Spirits, Wine, and Beer
Imported or Brought Into the United States From the U.S. Virgin Islands
Subject to Tax
As noted above, the Federal excise tax due on the importation of
distilled spirits, wine, and beer is collected by CBP, along with any
applicable duties. See 27 CFR 27.48. Similarly, liquors coming into the
United States from the U.S. Virgin Islands are generally subject to a
tax equal to the internal revenue tax imposed upon the production in
the United States of like liquors. See 27 CFR 26.200. Such taxes are
collected by CBP, along with any applicable duties.
To help ensure appropriate tax payment, TTB is proposing in this
rulemaking to require that importers file and/or retain certain
information regarding distilled spirits, wine, and beer imported into
the United States or brought into the United States from the U.S.
Virgin Islands subject to tax. Specifically, TTB is proposing to amend
Sec. Sec. 27.48 and 26.200 to require from electronic filers of TTB
data information about the importer (name, FAA Act basic permit number,
address, and employer identification number (EIN)) and the ultimate
consignee (name and address) as well as information identifying the
distilled spirits, wine, or beer for IRC or FAA Act purposes and the
quantity of each product. Proposed amendments to Sec. Sec. 27.48 and
26.200 also refer to the COLA requirement that may apply under Sec.
4.40, 5.51, or 7.31. For importers filing TTB data electronically, this
information would be required to be filed with CBP at the time of
filing the customs entry or entry summary, as appropriate, along with
any other information that is required by CBP for purposes of
determining and collecting the Federal excise tax and administering the
provisions of the IRC and FAA Act. The proposed text also includes a
clarification that, if any of the information required by TTB is also
filed by the importer with CBP upon entry or entry summary, as
appropriate, for purposes of meeting CBP requirements, the submission
of information for CBP purposes will also meet the TTB requirements.
That is, generally, the importer need not enter the same information
twice. TTB understands that quantities of distilled spirits are
currently submitted to CBP in proof liters and not in proof gallons,
and so proposes in Sec. Sec. 27.48, 26.200, and elsewhere to accept
the filing of quantities of distilled spirits in proof liters, and to
add a definition of ``proof liter'' to Sec. Sec. 27.11 and 26.11.
Regardless of the method of filing, the importer must retain the
information required, any information provided to CBP to meet CBP
requirements, and any supporting documentation, and make such records
available for inspection by the appropriate TTB officer or a customs
officer.
TTB is also proposing a technical correction to the definition of
``importer'' at Sec. 26.11. As revised, an importer is defined as any
person who brings distilled spirits, wines, or beer into the United
States from the Virgin Islands. Other proposed technical corrections
update statutory references at Sec. Sec. 26.263 and 26.264, pertaining
to the determination of tax on beer and wine, respectively.
J. Entry of Distilled Spirits To Which an Effective Tax Rate or
Standard Effective Tax Rate Applies
Section 5010 of the IRC (26 U.S.C. 5010) provides a credit against
the tax imposed on distilled spirits for any eligible wine or eligible
nonbeverage flavors used in the manufacture of the distilled spirits.
This credit results in an effective tax rate, which is a reduced rate
of tax. For imported distilled spirits, pursuant to section 5010(b)(2),
the wine content and flavors content of the distilled spirits are
established by chemical analysis, certification, or other methods set
forth in regulations prescribed by the Secretary. Sections 27.76 and
27.77 of the TTB regulations (27 CFR 27.76 and 27.77) set forth the
methods by which the effective tax rates are determined and applied to
imported distilled spirits. Section 26.204a (27 CFR 26.204a) sets forth
the method by which the effective tax rates are determined and applied
to distilled spirits brought into the United States from the U.S.
Virgin Islands.
An importer of distilled spirits may obtain and apply an effective
tax rate in one of two ways. Under one approach, provided in Sec.
27.76, the importer obtains from TTB a ``statement of eligibility'' for
each wine and flavor used in the product, and then prepares a
``certificate of effective tax rate computation'' for each shipment.
The importer must file this certificate with CBP at the port of entry
at the time it files the relevant entry summary. A similar approach is
also available to persons bringing distilled spirits into the United
States from the U.S. Virgin Islands, except that, instead of preparing
a specific certificate of effective tax rate computation, the importer
must submit the information upon which the effective tax rate is based,
along with other information about the shipment, in a certificate
specified in section 26.205 (27 CFR 26.205). Alternatively, the
importer may have a ``standard effective tax rate'' established by TTB
pursuant to Sec. 27.77. A standard effective tax rate may be used
continually for each importation of a product because it is based on
the lowest quantities and lowest alcohol content of eligible wine and
flavors used in making the particular product. Under current
regulations, a copy of the standard effective tax rate approval must be
filed with CBP at the port of entry at the time of entry summary.
TTB believes it is no longer necessary for the importer to submit
the certificate of effective tax rate computation or the standard
effective tax rate approval document to CBP during the entry process,
provided that the importer possesses one of these documents and makes
it available upon request. TTB believes that the data already provided
by the importer to CBP during the entry process regarding the tax
applicable to the imported distilled spirits is sufficient for
enforcement of the effective tax rate provisions when combined with the
importer's FAA Act basic permit number and the COLA identification
number upon importation (the filing of which are proposed in this
document). Therefore, TTB proposes to amend Sec. Sec. 27.76 and 27.77
to remove the requirement that the importer submit the certificate of
effective tax rate or the standard effective tax rate approval at
entry, although the importer must have the certificate in its
possession at the time of filing the entry summary and a copy must be
provided to an appropriate TTB officer or a customs officer upon
request. TTB also proposes to specify, in a new paragraph (e) in both
Sec. 27.76 and Sec. 27.77, that the
[[Page 40413]]
importer must retain a copy of the certificate or approval in
accordance with the record retention requirements in 27 CFR part 27 and
provide it upon request. For persons bringing distilled spirits into
the United States from the U.S. Virgin Islands, the information will
continue to be entered into the certificate specified in Sec. 26.205.
As with imported distilled spirits, TTB also proposes to specify, in a
new paragraph (c) in Sec. 26.205, that the person bringing the
distilled spirits into the United States must retain a copy of the
certificate and records to substantiate information on the certificate,
such as information regarding an effective tax rate, in accordance with
the record retention requirements in 27 CFR part 26 and provide them
upon request.
When distilled spirits eligible for an effective tax rate are
removed from customs custody in bulk without payment of tax for
transfer to a domestic distilled spirits plant, current and proposed
Sec. Sec. 27.76 and 27.77 provide that the importer must furnish a
copy of the certificate or approval to the proprietor of the distilled
spirits plant to which the distilled spirits are transferred.
Similarly, proposed Sec. 26.205 requires that the certificate showing
information regarding liquors brought into the United States from the
U.S. Virgin Islands, which would include information related to the
effective tax rate if applicable, be provided to the receiving
distilled spirits plant.
K. Distilled Spirits, Wine, and Beer Imported or Brought Into the
United States Without Payment of Tax in Bulk Containers
As noted above, under 26 U.S.C. 5232, distilled spirits imported or
brought into the United States in bulk containers may, under
regulations prescribed by the Secretary of the Treasury, be withdrawn
from customs custody and transferred in such bulk containers or by
pipeline to the bonded premises of a distilled spirits plant without
payment of the internal revenue tax. The person operating the bonded
premises of the distilled spirits plant receiving the spirits becomes
liable for the tax upon release of the spirits from customs custody.
Section 27.11 (27 CFR 27.11) defines the term ``bulk containers'' as
any container having a capacity of more than one gallon. Subpart L of
part 27 and subpart Oa of part 26 currently contain the provisions
related to the transfer of distilled spirits from customs custody to
the bonded premises of a distilled spirits plant.
Prior to 1998, the IRC contained no provisions allowing the
importation of wine without payment of the excise tax imposed by
section 5041 or the importation of beer without payment of the excise
tax imposed by section 5051. Wine and beer could both be imported in
bulk or in any type of container, but no provision existed in the IRC
to defer payment of the excise tax on importation, or to permit the
movement of imported wine or beer, without payment of tax, onto bonded
wine cellar premises or brewery premises, as applicable, where it would
be covered by the TTB bond.
Effective April 1, 1998, sections 1421 and 1422 of the Taxpayer
Relief Act of 1997, Public Law 105-34, amended the IRC to authorize the
transfer without payment of tax of imported wine in bulk containers
from customs custody to a bonded wine cellar and the transfer of beer
in bulk containers from customs custody to a brewery premises. See 26
U.S.C. 5364 and 5418, respectively. A subsequent provision enacted by
section 6014 of the Internal Revenue Restructuring and Reform Act of
1998, Public Law 105-206, restricted bulk imported wine to ``Natural
wine (as defined in section 5381).''
Under 26 U.S.C. 5364 and 5418, as amended, the physical transfer of
wine or beer is accompanied by a transfer of the excise tax liability
existing for such wine from the customs bond of the importer to the
wine or beer bond of the receiving bonded wine cellar or brewery, as
the case may be. Excise tax payment on such imported wine or beer is
deferred until the time when the wine or beer is removed from the
bonded wine cellar or brewery, as applicable, for consumption or sale.
At that time, the taxation provisions of section 5041 of the IRC apply
to the wine and those of section 5051 of the IRC apply to beer.
Accordingly, the proprietor of the bonded wine cellar pays the tax by
return under the IRC and the TTB provisions applicable to domestic wine
removed subject to tax, while the brewer pays the tax by return under
the IRC and the TTB provisions applicable to domestic beer removed
subject to tax.
In March 1998, ATF issued two ATF Procedures regarding the
administration of sections 1421 and 1422 of Public Law 105-34. The
procedures are ATF Procedure 98-2, concerning importation and transfer
of beer in bulk containers to a brewery premises, and ATF Procedure 98-
3, concerning importation and transfer of wine in bulk containers to a
bonded wine cellar. These two procedures provide guidance and set forth
requirements applicable to importers of wine and beer in bulk
containers and proprietors of the domestic facilities receiving the
bulk wine and beer, which have not yet been incorporated into the TTB
regulations. With respect to importers, both procedures require that,
on release of the bulk product from customs custody, the importer
prepare a transfer record documenting the transfer of the product. With
respect to wine, ATF Procedure 98-3 provides that the transfer record
will identify the importer and show the number of containers
transferred and quantity of wine within each container, the origin of
the wine, the customs entry number, the amount of duty paid, the kind
of wine, and information identifying the foreign producer. With respect
to beer, ATF Procedure 98-2 provides that the transfer record will
identify the importer and will show the number of containers
transferred and quantity of beer within each container, the foreign
origin of the beer, the customs entry number, the amount of duty paid,
the kind of beer, and information identifying the foreign brewer.
Neither procedure requires the information to be submitted to CBP as
part of the customs entry or entry summary.
ATF Procedures 98-2 and 98-3 also provide guidance to domestic
manufacturers who receive shipments of bulk wine or beer. In this
rulemaking, TTB is not addressing such guidance, because the primary
intent of this rulemaking is to address and prepare for the submission
by importers of electronic importation information, and procedural
rules relating to the operations of domestic recipients of the
shipments are beyond the scope of this rulemaking. With regard to
importers, TTB is proposing to amend the provisions of 27 CFR part 27
to expand the scope of subpart L, and 27 CFR part 26 to expand the
scope of subpart Oa, which currently only address transfers of bulk
distilled spirits from customs custody to the bonded premises of
distilled spirits plants. Specifically, Sec. 27.171 of part 27
currently sets forth general provisions regarding the importation of
bulk distilled spirits, and Sec. 26.300 sets forth general provisions
regarding bringing bulk distilled spirits into the United States from
the U.S. Virgin Islands. Under the proposed regulations, the current
texts of each section will be designated as (a) and new paragraphs (b)
and (c) will set forth the general provisions related to the
importation of bulk beer and wine without payment of tax.
In subpart L of part 27, 27 CFR 27.172 currently requires a person
importing distilled spirits and transferring them from customs custody
to the bonded premises of a distilled spirits plant without payment of
tax to prepare a
[[Page 40414]]
transfer record for each conveyance and, if the spirits are in
packages, a package gauge record that must be attached to the transfer
record. The transfer record and the package gauge record must be
prepared in triplicate, and, upon release of the spirits from customs
custody, one copy must be given to CBP, one copy must be forwarded to
the appropriate TTB officer, and the original must be forwarded to the
consignee.
The specific requirements regarding the transfer record's contents
are set forth in 27 CFR 27.138. Under Sec. 27.138, the transfer record
must be given a serial number by the preparer and must contain such
information as the name and IRC registry number of the distilled
spirits plant receiving the spirits from customs custody, the country
of origin, the name of the foreign producer, the kind of spirits, the
age and proof of the spirits, the proof gallons of the spirits, and the
type and number of containers in the shipment. The specific
requirements regarding the package gauge record's contents are set
forth in 27 CFR 27.139. Under Sec. 27.139, the package gauge record
must contain information about each package, including the package
identification or serial number; the kind of spirits; the gross weight,
proof, and proof gallons of the spirits; the name of the warehouseman
who received the spirits from customs custody; and the name of the
importer. Similar provisions are set forth for persons bringing
distilled spirits in bulk containers into the United States from the
U.S. Virgin Islands for transfer to a distilled spirits plant at
Sec. Sec. 26.301, 26.273a, and 26.273b (27 CFR 26.301, 26.273a, and
26.273b).
TTB is proposing to amend Sec. Sec. 27.172 and 26.301, which
currently require the preparation of the transfer record and package
gauge record for distilled spirits, to include the transfer record
requirements for wine and beer. Both sections as amended would require
that the transfer records be maintained by the person importing the
products or bringing them in from the U.S. Virgin Islands; the transfer
record documents would not be submitted to CBP. For importers filing
TTB data electronically, certain information from each transfer record
would be submitted to CBP with the filing of the entry or entry
summary, as appropriate. Under the proposal, the information required
would be the name and address of the ultimate consignee, the basic
permit number and EIN (if applicable) of the importer, the IRC registry
number of the ultimate consignee, information identifying each product
for IRC and/or FAA Act purposes, and the quantity in the shipment.
TTB is not proposing to amend the regulations at 27 CFR 27.139 and
26.273b regarding the specific information that must be contained in
the distilled spirits package gauge record. However, TTB is proposing
to remove Sec. 26.302 (27 CFR 26.302) and incorporate the package
gauge requirements of that section into amended Sec. 26.301. The
requirements of Sec. 26.302 that refer to preparing copies of
documents in duplicate and filing such copies would be removed
entirely.
TTB is proposing to amend Sec. Sec. 27.138 and 26.273a, the
transfer record, to add the specific information that is required to be
captured in the transfer record regarding transfers of wine and beer in
bulk from customs custody to the premises of the applicable TTB-bonded
premises. The information specified includes the information now
required by ATF Procedure 98-3, with respect to transfers of wine, and
ATF Procedure 98-2, with respect to transfers of beer, and adds the
following data elements applicable to both wine and beer: The date the
records are prepared, the name and address of the bonded wine cellar or
brewery receiving the wine from customs custody, and the IRC registry
number of the bonded wine cellar or brewery receiving the wine or beer
from customs custody. As noted above, under the proposed amendments to
Sec. Sec. 27.172 and 26.301, the transfer record would be maintained
by the importer (or person bringing the spirits into the United States
from the U.S. Virgin Islands), and from the transfer record only the
name and address of the ultimate consignee, the IRC registry number,
information identifying each product for IRC and/or FAA Act purposes,
and the quantity in the shipment would be required to be submitted upon
entry or entry summary, as appropriate. TTB is also proposing to add
the customs entry number and amount of duty paid to the specific
information that is required to be captured in the transfer record
regarding transfers of distilled spirits in bulk from customs custody
to the premises of the distilled spirits plant. TTB believes that this
information is important to track shipments of distilled spirits
transferred without payment of tax.
TTB is proposing to no longer require submission of the remaining
data elements currently required as part of the transfer record or
package gauge record, as TTB believes that they are either no longer
necessary to be submitted or that they can be requested of an industry
member as needed on a case-by-case basis, if not otherwise available
through data the industry member submits to CBP for purposes of meeting
CBP requirements.
The proposed amendments at Sec. Sec. 27.172 and 26.301 clarify
that if any of the information required by TTB is also filed by the
importer with CBP upon entry or entry summary, as appropriate, for
purposes of meeting CBP requirements, the submission of information for
CBP purposes will also meet the TTB requirements. In other words,
generally, when filing information electronically, the importer need
not enter the same information twice. Regardless of the method of
filing, the importer must retain records, including supporting records
to substantiate the information it filed with CBP, in accordance with
the record retention requirements of parts 27 and 26, and provide such
records upon request. Proposed Sec. Sec. 27.172 and 26.301 also
provide that all importers, including importers that do not file TTB
data electronically, must maintain the transfer record, specified
information, and supporting documentation, and make those records
available upon request of the appropriate TTB officer or a customs
officer.
In addition, proposed Sec. Sec. 27.172 and 26.301 state that the
importer must also provide a copy of the transfer record to the
recipient, if the recipient is not the importer. The proposed text
would remove the current requirement in Sec. 27.172 that the
``original'' transfer record be forwarded to the transferee, and help
ensure that the domestic TTB-bonded premises receive the record,
regardless of whether a shipment originates in a foreign country or the
U.S. Virgin Islands. Current and proposed Sec. Sec. 27.76 and 27.77
require that, when distilled spirits eligible for an effective tax rate
are transferred without payment of tax, the importer must furnish a
copy of the relevant approval or certificate to the domestic DSP
proprietor. Proposed Sec. 26.205 also requires that a certificate be
forwarded to the domestic TTB-bonded premises in the case of distilled
spirits, natural wine, and beer transferred without payment of tax.
TTB also proposes to amend the definition of ``bulk container'' in
27 CFR 27.11 and 26.11 to include references to bulk containers of wine
(any container larger than 60 liters) and to bulk containers of beer
(any container larger than 1 barrel of 31 gallons). The definition
proposed for ``bulk container'' of wine mirrors the definition of that
term in ATF Procedure 98-3 and in 27 CFR 24.11. (27 CFR part 24
contains the regulations applicable to operations of domestic wine
premises.) The definition proposed for ``bulk container'' of beer
mirrors the definition of that term set out in ATF Procedure
[[Page 40415]]
98-2. TTB is also proposing to add a definition of ``natural wine'' to
Sec. Sec. 27.11 and 26.11 to describe what wine may be imported or
brought into the United States in bulk without payment of tax.
Finally, TTB proposes a number of clarifying changes to the
regulations relating to imports in bulk. TTB proposes to add
definitions of ``Bonded wine cellar'', ``Brewery'', and ``IRC registry
number'' to Sec. Sec. 26.11 and 27.11. In paragraph (c) of Sec. 26.1,
which sets out the scope of the part 26 regulations, TTB proposes to
add a reference to bulk wine and bulk beer coming into the United
States from the U.S. Virgin Islands. In Sec. 26.273 (27 CFR 26.273),
which refers to the reporting and recording requirements of proprietors
of bonded premises, TTB proposes to add references to bonded wine
cellars and breweries. In Sec. 27.120 (27 CFR 27.120), TTB is updating
the reference to ``Regulation 3 (27 CFR part 3)'' to ``subpart E of
part 1,'' to reflect the regulatory changes made in T.D. ATF-373 (61 FR
26096). TTB also proposes to update the title of Sec. 27.175 to
clarify that it applies only to the receipt of distilled spirits by
proprietors of distilled spirits plants.
This regulation, if finalized, would supersede parallel provisions
of ATF Procedures 98-2 and 98-3.
L. Filing of Permit Number and Information for Industrial Alcohol
Shipments to the United States From the U.S. Virgin Islands
Section 5314(b)(1) of the IRC (26 U.S.C. 5314(b)(1)) authorizes, in
certain circumstances, distilled spirits produced or manufactured in
the U.S. Virgin Islands to be brought into the United States from the
U.S. Virgin Islands free of tax. Those circumstances include: (1) When
the alcohol has been ``denatured'' by the addition of materials that
make the spirits unfit for beverage consumption; (2) when the alcohol
is withdrawn by, and for the use of, the United States or any agency
thereof, any State, any political subdivision of a State, or the
District of Columbia, for nonbeverage purposes; and (3) when the
alcohol is withdrawn by an eligible person for certain specified
nonbeverage educational, medical, or research purposes.
Regulations pertaining to the use of denatured spirits are found in
27 CFR part 20 (Distribution and Use of Denatured Alcohol and Rum), and
regulations pertaining to the use of undenatured tax-free spirits are
in found in 27 CFR part 22 (Distribution and Use of Tax-Free Alcohol).
Under regulations in parts 20 and 22, TTB authorizes the withdrawal and
use of tax-free alcohol by issuing permits to eligible persons on TTB
Form 5150.9 and to government entities on TTB Form 5150.33 (or previous
editions on Form 1444).
The distilled spirits described above may be shipped tax-free to
the United States from the U.S. Virgin Islands under the provisions of
27 CFR part 26. Section 26.292 (27 CFR 26.292) requires that the
consignor or consignee file with CBP the permit issued to the consignee
under part 20 or 22 as evidence that the consignee is authorized to
enter the spirits free of tax. Sections 26.294 and 26.296 (27 CFR
26.294 and 26.296) require that each shipment be accompanied by a
record of shipment, consisting of an invoice, bill of lading, or
similar document that shows certain specified information about the
shipment, such as the consignee's name and address and the total
quantity of the shipment.
As with FAA Act basic permits, TTB assigns each of the permits
referenced in Sec. 26.292 a number so that TTB can track the permit
and its use. TTB proposes to amend Sec. 26.292 to require the
consignor or consignee, if filing TTB data electronically, to provide
the number associated with the consignee's permit to CBP upon entry of
the tax-free distilled spirits instead of a copy of its permit. The
permit number would be entered into ACE. The TTB permit number would
allow TTB to verify that the consignee is authorized to enter
industrial spirits or specially denatured spirits free of tax.
Revised 27 CFR 26.292 also provides that, regardless of the method
of filing, the consignor or the consignee must make the permit
available upon request by the appropriate TTB officer or a customs
officer.
TTB also proposes to amend Sec. Sec. 26.294 and 26.296 to remove
the statement that paper documents must ``accompany'' shipments into
the United States. As amended, Sec. Sec. 26.294 and 26.296 require the
consignor, if filing TTB data with CBP electronically, to file certain
information from the record of shipment with CBP, along with the filing
of the customs entry or entry summary, as appropriate, and maintain the
rest of the information required in the record of shipment as a record.
Records substantiating the information filed with CBP also must be
kept. As proposed, Sec. Sec. 26.294 and 26.296 also include the
clarification, that if any of the information required by TTB to be
provided to CBP is also required by CBP as part of the entry or entry
summary, the information provided to meet CBP requirements is
sufficient to also meet TTB requirements, and it need not be entered
twice.
M. Filing of Permit Number and Data by Government Agencies Importing
Distilled Spirits Free of Tax
Under section 5313 of the IRC, the United States Government or any
of its agencies may withdraw imported distilled spirits for nonbeverage
purposes free of tax from customs custody. As was mentioned above, TTB
issues permits to government entities that wish to use tax-free
distilled spirits. Section 27.183 (27 CFR 27.183) currently requires a
government agency withdrawing distilled spirits free of tax from
customs custody to provide a photocopy of its permit to ``the district
director of customs.'' For the same reasons as those discussed with
regard to shipments of distilled spirits from the U.S. Virgin Islands,
TTB proposes to amend Sec. 27.183 to require a government agency, if
filing TTB data with CBP electronically, to file the number associated
with the TTB-issued permit with CBP when the entry is filed. The permit
number would be entered into ACE. If the government agency is not
filing TTB data electronically, it must make a copy of the permit
available to the customs officer, upon request, at entry or any
subsequent time. TTB is also removing numerous references to ``the
district director of customs'' in part 27, replacing them with a more
general reference to CBP or removing the reference entirely.
Section 27.184 (27 CFR 27.184) currently requires identifying
numbers of containers and the quantity of tax-free spirits to be
recorded on entry documents. TTB proposes to amend Sec. 27.184 to
remove references to entry documents and simply require that the total
quantity be filed, along with the number of the TTB-issued permit.
Finally, TTB also proposes to remove Sec. 27.185 (27 CFR 27.185),
Customs release, as it describes customs processes and inspection. As
described earlier, TTB is generally proposing to remove most references
to actions that CBP will take at entry, and replace them, where
appropriate, with text that clarifies the requirements that apply to
the importer at entry.
N. Certificate Covering Distilled Spirits, Wine, or Beer Brought Into
the United States From the U.S. Virgin Islands
Section 26.205 (27 CFR 26.205) currently requires that every person
bringing distilled spirits, wine, or beer under part 26 into the United
States from the U.S. Virgin Islands, except tourists, obtain a
certificate in the English language from the manufacturer. The required
information in the certificate includes, among other things,
[[Page 40416]]
the name and address of the consignee, the kind and brand name, and the
quantity. Under paragraph (b) of Sec. 26.205, the person bringing the
distilled spirits, wine, or beer into the United States must file the
certificate and a record of gauge with CBP at the port of entry with
the entry summary. Section 26.260 (27 CFR 26.260) also requires the
certificate to be filed with CBP.
TTB proposes in this rulemaking to amend Sec. 26.205(b) to require
that any person bringing liquors into the United States file
information that appears on the certificate as required by proposed
Sec. 26.200. TTB proposes to add a new paragraph (c) to Sec. 26.205,
under which information associated with the certificate required under
that section must be maintained as a record and made available upon
request of the appropriate TTB officer or a customs officer. TTB
proposes to amend Sec. 26.260 to cross-reference the requirements set
forth in Sec. Sec. 26.200, 26.204, and 26.205. Finally, TTB proposes
to add a new paragraph (d) to Sec. 26.205, to require that for
distilled spirits, natural wine, or beer withdrawn from customs custody
without payment of tax, the importer must furnish a copy of the
certificate described in Sec. 26.205 to the proprietor of the
receiving distilled spirits plant, bonded wine cellar, or brewery.
O. Clarification of Record Retention Requirements
Sections 26.276 and 27.137 (27 CFR 26.276 and 27.137) currently set
forth certain recordkeeping requirements for all documents or copies of
documents that support records required by parts 26 and 27,
respectively. TTB proposes to amend each of these sections to provide
that the length of time during which the records must be kept is
measured from the time of withdrawal from customs custody. TTB also
proposes to provide that the records must be made available upon
request of the appropriate TTB officer or a customs officer, rather
than made available during business hours as the texts of these
sections currently state. This amendment would provide for alternative
means of providing such records, such as by mail or email. TTB also
proposes to clarify that supporting documents include data filed with
CBP pursuant to CBP requirements.
P. Removal of Requirements for CBP to Gauge or Inspect
Certain TTB regulations currently state that customs officers shall
inspect or gauge shipments of alcohol before release. Section 26.261
(27 CFR 26.261) states that CBP will regauge or inspect a consignment
of liquors from the U.S. Virgin Islands to the United States to
determine the tax due on the consignment. Section 26.297 (27 CFR
26.297) states that CBP shall inspect shipments of industrial spirits,
specially denatured spirits, completely denatured alcohol, and products
made with denatured spirits coming into the United States from the U.S.
Virgin Islands. Section 26.303 (27 CFR 26.303) directs CBP to inspect
shipments of bulk distilled spirits brought into the United States from
the U.S. Virgin Islands and being transferred free of tax. Similarly,
under Sec. 27.173 (27 CFR 27.173) CBP shall inspect imports of bulk
distilled spirits being transferred free of tax, and enter certain
information on the transfer record. Finally, Sec. 27.185 (27 CFR
27.185) requires CBP to inspect imported distilled spirits being
released without payment of tax for use of the United States. These
inspections are generally to detect losses in transit.
TTB proposes to remove these provisions. TTB believes that it is
not now necessary to state that CBP will gauge or inspect all such
consignments or shipments. TTB notes that persons receiving the alcohol
are subject to regulation by TTB, and are required to take action to
determine if losses have occurred. Accordingly, TTB proposes to remove
Sec. Sec. 26.261, 26.297, 26.303, 27.173, and 27.185.
Q. Filing of Data for Importation of Tobacco Products Subject to Tax
and Processed Tobacco
The Federal excise tax due incident to the importation of tobacco
products and cigarette papers and tubes is collected by CBP, along with
any applicable duties. Tobacco products and cigarette papers and tubes
coming into the United States from the U.S. Virgin Islands are
generally subject to a tax equal to the internal revenue tax imposed
upon the production in the United States of like products. Such taxes
are collected by CBP, along with any applicable duties. Processed
tobacco is not subject to tax but the importation of processed tobacco
is subject to TTB regulation. Anyone engaged in the business of
importing processed tobacco must obtain a permit, issued by TTB, prior
to engaging in such business. See 26 U.S.C. 5712 and 5713.
Current 27 CFR 41.81 requires that, when tobacco products and
cigarette papers and tubes are released from customs custody for
consumption, importers must maintain certain information about those
shipments and, if the customs form or the electronic transmission of
information allows for the reporting of that information, file the
information with CBP. The information required to be submitted or
maintained under current Sec. 41.81 includes, for example,
identification of the imported product as it is classified under the
IRC, the quantity imported, and the tax due. Although a permit is
required to import tobacco products subject to tax, the regulations do
not currently state the conditions under which an importer obtaining
release of tobacco products subject to tax must provide the permit or
proof of having obtained the permit to CBP during importation. TTB is
proposing to update the information required to be filed and recorded.
Under the proposed regulations, the importer of tobacco products
that files TTB data electronically must still file certain information
identifying the imported product as it is classified under the IRC and
the quantity imported, as well as information identifying the importer
(by TTB permit number and employer identification number, or EIN) and
the ultimate consignee. With regard to the TTB permit number and EIN,
each permit to import tobacco products issued by TTB has a number
associated with it. Amending the regulations to provide for the
electronic submission of the permit number by importers that file TTB
data electronically would make clearer to the importer what is required
upon importation of TTB-regulated tobacco products and make the permit
requirement more transparent and consistent. It would also allow TTB to
link more easily specific importations to the records importers keep
and the reports they submit to TTB. For importers of cigarette papers
and tubes, the regulations set forth similar filing requirements, but
do not require submission of a permit number because importers of
cigarette papers and tubes are not required to obtain a TTB permit.
Proposed Sec. 41.81 provides that any information required by that
section and also filed with CBP as part of the entry or entry summary
for purposes of meeting CBP requirements will also satisfy the TTB
requirement. That is, generally, when filing information
electronically, the importer need not enter the same information twice.
Whether or not the importer files TTB data electronically, revised
27 CFR 41.81 provides that the importer must retain the information
required by Sec. 41.81, any information provided to CBP for purposes
of meeting CBP requirements, and any supporting documentation and make
such records available upon request by the appropriate TTB officer or a
customs officer.
[[Page 40417]]
In this document, TTB is also proposing to add a new section 27 CFR
41.265 to outline the process for importing processed tobacco. The
requirements, as proposed, are similar to those for importers of
tobacco products and cigarette papers and tubes. That is, if filing TTB
data electronically, the importer must file with CBP certain
information identifying the importer (by TTB permit number and employer
identification number, or EIN), the ultimate consignee, and the import
as ``processed tobacco'' and quantity. The proposed regulation
clarifies that any information required by that section, that is filed
with CBP as part of the entry or entry summary for purposes of meeting
CBP requirements, will also satisfy the TTB requirement. Whether or not
the importer files TTB data electronically, revised 27 CFR 41.265
provides that the importer must retain the information required by this
section, any information submitted to CBP to meet CBP requirements, and
any supporting documentation and make such records available upon
request by the appropriate TTB officer or a customs officer.
TTB is also proposing to amend 27 CFR 41.204, which concerns
records and reports. Currently, that section states that every tobacco
products importer must keep records and submit reports, when required,
of the physical receipt and disposition of tobacco products. The
proposed regulations remove the reference to ``physical'' receipt and
disposition. As proposed, the importer would be responsible for
accounting for all tobacco products released from customs custody under
the importer's TTB permit, including receipt and disposition. Proposed
Sec. 41.204 would also require recordkeeping by importers of cigarette
papers and tubes.
R. Filing of Data for Importation of Tobacco Products Without Payment
of Tax
As noted above, imported tobacco products and cigarette papers and
tubes may be released from customs custody without payment of tax for
delivery to a proprietor of an export warehouse, or to a manufacturer
of tobacco products or cigarette papers and tubes if such articles are
not put up in packages, in accordance with such regulations and under
such bond as the Secretary shall prescribe. See 26 U.S.C. 5704(c).
Imported tobacco products and cigarette papers and tubes previously
exported and returned may be released from customs custody without
payment of tax for delivery to the original manufacturer or an export
warehouse proprietor authorized by such manufacturer to receive the
products, in accordance with such regulations and under such bond as
the Secretary shall prescribe. See 26 U.S.C. 5704(d).
Section 41.86 (27 CFR 41.86) addresses releases of tobacco products
and cigarette papers and tubes from customs custody without payment of
tax. Section 41.86 requires that a manufacturer or export warehouse
proprietor wanting to obtain release of tobacco products or cigarette
papers or tubes, under the provisions of 26 U.S.C. 5704(c) and (d), for
transfer under bond to the manufacturer's or export warehouse
proprietor's premises must prepare a notice of release on TTB F 5200.11
and file the form with the appropriate TTB officer, who certifies that
the manufacturer or export warehouse proprietor meets the statutory
requirements to obtain release. The importer makes this document
available for the CBP officer, who verifies that the TTB F 5200.11 has
been certified and provides a copy of the form to the importer. After
release, the importer is currently required to send a copy of the form
to TTB. Section 41.86(b) recognizes the use of electronic filing with
CBP but does not specify how the TTB F 5200.11 is to be used to obtain
the release electronically.
TTB proposes amending Sec. 41.86 to provide the option for the
data required on the TTB F 5200.11 to be submitted to CBP
electronically, rather than on a paper form. Those not filing TTB data
electronically with CBP must continue to use the paper form, be in
possession of the TTB-certified form at the time the products are
released from customs custody, and make the form available to a customs
officer upon request. TTB notes that the proposed regulations would
require, when applicable, two data elements (the TTB Importer Permit
number and the recipient's EIN) that do not currently appear on the TTB
F 5200.11. Amendments to the form would be made to mirror any final
regulations. Section 41.86 would also be amended to specify the
circumstances under which tobacco products and cigarette papers and
tubes may be released from customs custody without payment of tax and
to include a specific recordkeeping requirement, that regardless of the
method of filing, the information required to be submitted to CBP must
be retained along with any supporting documentation, and such records
must be available for inspection upon request by the appropriate TTB
officer or a customs officer.
S. Entry for Warehousing of Distilled Spirits, Wines, Beer, Tobacco
Products, and Cigarette Papers and Tubes
Under the IRC at 26 U.S.C. 5061(d)(2), for distilled spirits, wine,
and beer entered for warehousing (such as those commodities imported
and transferred directly to a customs bonded warehouse or foreign trade
zone and subsequently transferred between such warehouses), the last
day for payment of the tax shall not be later than the 14th day after
the last day of the semimonthly period during which the products are
removed from the first such warehouse, even if the products are removed
from that customs bonded warehouse or foreign trade zone for transfer
to another customs bonded warehouse or foreign trade zone. There is an
exception to this rule for products that are shown to the satisfaction
of the Secretary to be destined for export. The IRC at 26 U.S.C.
5703(b)(2) mirrors these provisions for tobacco products and cigarette
papers and tubes. Neither of these statutory requirements has yet been
incorporated into the TTB regulations in part 26, 27, or 41. TTB
proposes in this document to add appropriate regulatory text in 27 CFR
26.200 (regarding distilled spirits, wine, and beer brought into the
United States from the U.S. Virgin Islands), 27.45 (regarding the time
of the determination of the tax on beer), 27.48 (regarding the
importation of distilled spirits, wine, and beer), and new 41.84
(regarding the importation of tobacco products) to reflect these
statutory provisions.
IV. Public Participation
A. Comments Invited
TTB invites comments from interested members of the public on this
proposed rulemaking. Regarding the effective date for these
regulations, TTB solicits views on the amount of time that importers
believe would be needed to develop functionality to file TTB data
electronically. In the Interim Final Rule, ``Automated Commercial
Environment (ACE) Filings for Electronic Entry/Entry Summary (Cargo
Release and Related Entry),'' 80 FR 61278, 61281 (2015), CBP announced
that it is considering a ``proposal to eliminate hybrid filing.'' That
proposal would require importers to choose between submitting CBP entry
and entry summary documentation (including all required TTB and other
Partner Government Agency data) either entirely electronically or
entirely on paper. CBP would no longer accept any hybrid filings,
except in limited circumstances. This would mean that if an importer
files one paper document not covered by the limited exceptions,
[[Page 40418]]
the entire filing, including the report to CBP, must be on paper. TTB
is interested in comments from the public regarding how their
implementation of the TTB electronic filing processes described in this
document would be impacted by a CBP decision to eliminate hybrid
filing.
TTB is currently allowing importers that are prepared to file
electronically to do so through a pilot program announced by TTB in a
Federal Register notice, ``Importation of Distilled Spirits, Wine,
Beer, Tobacco Products, Processed Tobacco, 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,'' (80 FR 47558, August 7, 2015). Importers participating
in the pilot program are doing so under an alternate method published
by TTB in Industry Circular 2015-1 on www.ttb.gov. TTB encourages
importers to participate in the pilot program, test the usability and
functionality of the TTB PGA Message Set, and provide comments.
B. Submitting Comments
Please submit your comments by the closing date shown above in this
document. You may submit comments in one of the following three ways:
Federal e-Rulemaking Portal: You may send comments via the
online comment form associated with this document in Docket No. TTB-
2016-0004 on ``Regulations.gov,'' the Federal e-rulemaking portal, at
https://www.regulations.gov. A direct link to that docket is available
under Notice No. 159 on the TTB Web site at https://www.ttb.gov/regulations_laws/all_rulemaking.shtml. Supplemental files may be
attached to comments submitted via Regulations.gov. For information on
how to use Regulations.gov, click on the site's 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.
Your comments must reference Notice No. 159 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 accept anonymous comments, does not acknowledge receipt of
comments, and considers all comments as originals.
If you are commenting on behalf of an association, business, or
other entity, your comment must include the entity's name as well as
your name and position title. If you comment via Regulations.gov,
please enter the entity's name in the ``Organization'' blank of the
comment form. If you comment via mail, please submit your entity's
comment on letterhead.
You may also write to the Administrator before the comment closing
date to ask for a public hearing. The Administrator reserves the right
to determine whether to hold a public hearing.
C. 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 confidential or inappropriate for public
disclosure.
D. Public Disclosure
On the Federal e-rulemaking portal, Regulations.gov, TTB will post,
and the public may view, copies of this document and any electronic or
mailed comments we receive about it. A direct link to the
Regulations.gov docket containing this document and the posted comments
received on it is available on the TTB Web site at https://www.ttb.gov/regulations_laws/all_rulemaking.shtml under Notice No. 159. You may
also reach the docket containing this document and its related comments
through the Regulations.gov search page at https://www.regulations.gov.
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 and other members of the public may view copies of this notice
of proposed rulemaking and any electronic or mailed comments TTB
receives on it 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 the TTB 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.
V. Regulatory Analysis and Notices
A. Executive Order 12866
It has been determined that this proposed rule is not a significant
regulatory action as defined by Executive Order 12866. Therefore, a
regulatory impact assessment is not required.
B. Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.), TTB has analyzed the potential economic effects of this action
on small entities. In lieu of the initial regulatory flexibility
analysis required to accompany proposed rules under 5 U.S.C. 603,
section 605 allows the head of an agency to certify that a rule will
not, if promulgated, have a significant economic impact on a
substantial number of small entities. The following analysis provides
the factual basis for TTB's certification under section 605.
Impact on Small Entities
While TTB believes the majority of businesses subject to this
proposed rule are small businesses, the changes proposed in this
document will not have a significant impact on those small entities.
Electronic filing will not be required under the proposed changes. For
entities filing on paper, the proposed changes will generally only
require that certain additional information must be kept as a record.
Furthermore, the majority of changes that TTB is proposing in this
document would provide importers with more predictability regarding the
data required at importation, and the proposed electronic filing option
would allow importers to more easily provide information required to
import alcohol and tobacco products. This would facilitate the movement
of the commodities from the port of entry into U.S. commerce, and
reduce the possibility of cargo being delayed at the port. As small
entities typically have fewer resources than large entities to devote
to regulatory compliance and logistics, these benefits could have a
disproportionately positive effect for small entities.
In addition, these changes will allow importers the option to
provide data required by the U.S. government in order to clear their
imported goods through a single window, rather than the current
practice of filling out separate forms for commodities subject to
regulation by multiple Federal agencies.
The changes in the proposed rule can be divided into three classes
with respect to their impact on entities: (1)
[[Page 40419]]
Providing an electronic filing alternative to requirements to submit
paper documents to CBP as part of the customs entry or entry summary
filing; (2) replacing reporting requirements with recordkeeping
requirements, under which the importer must make documents available
upon request; and (3) adding some filing requirements. An example of
the electronic filing alternative is the proposal to address the COLA.
Current regulations require that the COLA be ``deposited with'' CBP
before the alcohol beverages covered by the COLA are released from
customs custody. TTB is proposing instead to require that importers
that file TTB data electronically input the number of the COLA with the
filing of the customs entry. Electronic filing provides a non-paper
alternative to submitting information. It is likely that such an
alternative will be welcomed by importers that prefer to file
electronically, as including paper documents in shipments is likely
more burdensome than submitting data electronically. Paper COLAs will
continue to be required from importers that do not file TTB data
electronically.
An example of replacing reporting with recordkeeping is the
proposal to address foreign certificates, which include certificates of
age and origin for certain distilled spirits; certification of origin
and identity for certain wine; and certification of proper cellar
treatment of natural wine. In general, current regulations require that
the foreign certificate ``accompany'' the importation. TTB is proposing
instead that the importer obtain the certificate prior to importation
and only make it available upon request. If filing TTB data
electronically, at the filing of the entry or entry summary, the
importer would certify that it has complied and will comply with these
conditions. The burden of including paper documents in shipments is
being removed for both electronic and paper filers in these instances.
An example of requiring new information is the proposal that
importers that import alcohol or tobacco products subject to tax and
file TTB data electronically provide at entry or entry summary: The
importer's TTB permit number; the importer's EIN; the name and address
of the ultimate consignee; the quantity of each product; and
information identifying each product for IRC and/or FAA Act purposes.
Importers that do not file electronically would be required to maintain
records of the information to be made available upon request. TTB
believes that the impact of this change would be minimal because much
of this information is already submitted to CBP for CBP purposes.
In conclusion, while the entities affected by the proposed rule
include a substantial number of small entities, the effects of the
changes in this proposed rule in general, and in particular the
provision of electronic filing alternatives and the replacement of
reporting requirements with recordkeeping requirements, are expected to
be positive for the affected entities. The proposals generally provide
additional options for complying with import requirements and allow
importers that prefer filing electronically to meet TTB requirements
through electronic means.
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.), TTB certifies that this proposed rule, if promulgated, will not
have a significant economic impact on a substantial number of small
entities. The proposed rule will not impose, or otherwise cause, a
significant increase in reporting, recordkeeping, or other compliance
burdens on a substantial number of small entities. The proposed rule is
not expected to have significant secondary or incidental effects on a
substantial number of small entities. Accordingly, a regulatory
flexibility analysis is not required. Pursuant to 26 U.S.C. 7805(f),
TTB will submit the proposed regulations to the Chief Counsel for
Advocacy of the Small Business Administration for comment on the impact
of the proposed regulations on small businesses.
C. Paperwork Reduction Act
Regulations addressed in this document contain current collections
of information that have been previously reviewed and approved by the
Office of Management and Budget (OMB) in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3504(h)) and assigned control numbers
1513-0020, 1513-0025, 1513-0056, 1513-0059, 1513-0062, 1513-0064, 1513-
0088, 1513-0106, and 1513-0119. The specific regulatory sections in
this proposed rule that contain collections of information, either
current or proposed, are Sec. Sec. 1.58, 4.27, 4.40, 4.45, 4.53, 4.70,
5.45, 5.51, 5.52, 5.56, 7.31, 26.200, 26.205, 26.273a, 26.276, 26.292,
26.294, 26.296, 26.301, 26.302, 26.314, 26.318, 26.319, 26.331, 27.48,
27.76, 27.77, 27.137, 27.138, 27.140, 27.172, 27.204, 27.208, 27.209,
27.221, 41.81, 41.86, 41.204, and 41.265. An 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.
Several amendments proposed in this document would allow importers
to file information required at importation electronically, rather than
on paper. In many cases, the proposed regulations require information
that the importer would already file as part of its customs entry or
entry summary in order to meet CBP requirements and, in such cases, the
information submitted to CBP to meet CBP requirements would also
satisfy the TTB requirements. In some cases, new information is
required to be submitted at importation. Whether the information is
information currently required to be submitted at importation or
whether it is a new requirement, the importer has the option of filing
the TTB data electronically with CBP. Regardless of the method of
filing, the importer must retain and provide the information upon
request. TTB has submitted a revision to OMB control number 1513-0064,
Importers' Records and Reports, to include the information that TTB is
proposing to require importers that file TTB data electronically to
submit electronically at entry or entry summary, as well as the
information that must made available by all importers upon request.
Upon revision of OMB control number 1513-0064, that collection will
include information related to importers' compliance with the Federal
Alcohol Administration Act (FAA Act) and with the Internal Revenue Code
of 1986 (IRC), as described below.
Under the proposed regulations, persons who import, or bring into
the United States from the U.S. Virgin Islands, distilled spirits,
wine, or malt beverages under an FAA Act basic permit and who file TTB
data electronically would be required to submit certain information to
show compliance with FAA Act provisions. Under proposed Sec. 1.58,
every person required to obtain a basic permit as an importer must,
when importing distilled spirits, wine, or malt beverages under that
permit and filing TTB data electronically, file the number of the
permit with CBP along with the filing of the customs entry, and,
regardless of the method of filing, must make the permit available upon
request.
Further, current Sec. Sec. 4.27, 4.45, and 5.52, require foreign
certificates, which include certification of vintage wine,
certification of origin and identity for certain wine, certification of
proper cellar treatment of natural wine (as required under 27 CFR
27.140), and certification of age and origin for certain distilled
spirits. Under current regulations, the importer must obtain such
certificates prior to importation; importations of products subject to
such
[[Page 40420]]
requirements generally must be accompanied by the certificates. Under
the proposed regulations at Sec. Sec. 4.45 and 5.52, the importer must
make the applicable certificate available upon request. If filing TTB
data electronically, as part of the customs filing, the importer may be
asked to make an attestation that it has obtained a certificate and
will make it available upon request. In addition, TTB proposes to add
Sec. 4.53 to clarify that bottlers of bulk imported wine must also
possess a certificate of origin or a certification of proper cellar
treatment of natural wine (as required under 27 CFR 27.140), when
applicable, that provides the same information as a certificate
required for importers of wine in bottles. Proposed Sec. Sec. 4.53 and
5.56 also specify the applicable record retention requirements for the
certificates. TTB proposes to remove the certification of vintage wine
requirement from Sec. 4.27 and to require industry members to
demonstrate upon request that the wine is entitled to be labeled with
the vintage date. (The natural wine certificate required by Sec. Sec.
4.45 and 27.140 is currently included in the collection of information
assigned OMB control number 1513-0119, Certification of Proper Cellar
Treatment for Imported Natural Wine. TTB has submitted to OMB a
revision of that information collection to make reference to Sec.
4.45.)
The amendments proposed to Sec. Sec. 4.70 and 5.45 would
incorporate the exceptions to the standards of fill for imported wine
and imported distilled spirits (respectively), currently found in
Sec. Sec. 4.46 and 5.53, stating that the standards of fill do not
apply to such wine or distilled spirits bottled or packed before
January 1, 1979 (or before July 1, 1989 in the case of distilled
spirits in 500 mL containers). Under the proposed amendment, the
currently-required foreign certificate must be made available to TTB
upon request, instead of accompanying the shipment.
For bottled distilled spirits, wine, or malt beverages, the
proposed regulations also require from those filing TTB data
electronically the submission of the TTB-assigned number of the
product's valid certificate of label approval (COLA). TTB proposes to
amend regulatory sections that currently require the depositing of the
COLA, TTB Form 5100.31, with CBP at the port of entry of a shipment, in
order for the bottled distilled spirits, wine, or malt beverage to be
released from customs custody. As proposed, if the importer is filing
the TTB data electronically, the importer would not deposit the COLA
with CBP but, rather, would file along with the customs entry the TTB-
assigned number of the approved COLA that corresponds to the label on
the bottle of distilled spirits, wine, or malt beverage. If the
importer is not filing TTB data electronically, a paper COLA will
continue to be required at entry. Currently, the requirement that
importers deposit the applicable COLA with CBP is set forth in
Sec. Sec. 4.40, 5.51, and 7.31 and is covered by OMB control number
1513-0020, Application for and Certification/Exemption of Label/Bottle
Approval (TTB F 5100.31), which also covers the information collected
on the form used to apply for the COLA. As part of this rulemaking, TTB
will include the electronic submission of the TTB-assigned COLA number
in OMB control number 1513-0064.
In addition to the FAA Act provisions described above, under the
proposed amendments, persons who import, or bring into the United
States from the U.S. Virgin Islands, distilled spirits, wine, beer,
tobacco products, processed tobacco, or cigarette papers or tubes that
are either released from customs custody subject to tax or without
payment of tax in bulk under certain exemptions would be required to
submit and/or make available upon request certain information to show
compliance with IRC provisions. The proposed amendments that affect the
collection of information are described below.
Proposed amendments to Sec. Sec. 26.200, 26.301, 27.48, 27.172,
41.81, 41.86, and new 41.265 set forth new data elements (in addition
to the FAA Act basic permit number, where applicable, as described
above) that must be filed with CBP when filing TTB data electronically
and, regardless of the method of filing, be kept as a record and made
available upon request. As noted above, in some cases this information
will already be filed by the importer pursuant to CBP guidelines
(either mandated or provided at the discretion of the importer) and, if
the importer files the information for CBP purposes, the importer will
satisfy the TTB requirement without additional action. In other cases,
the information is specific to the IRC or FAA Act and will not already
be filed by the importer with CBP for CBP purposes. When using the
option to file TTB data electronically, the data elements required by
the proposed amendments to Sec. Sec. 26.200, 27.48, and 41.81 are as
follows, with some variation depending on the products and
circumstances covered under the specific section: The number of the
importer's FAA Act basic permit; the importer's name, address, and
employer identification number (EIN) associated with that permit; the
name and address of the ultimate consignee; the quantity of each
product; and information identifying each product for IRC and/or FAA
Act purposes. The proposed amendments also require similar information
for releases of certain products from customs custody without payment
of tax under proposed Sec. Sec. 26.301, 27.172, and 41.86 and, for
releases of processed tobacco, which is not subject to tax, under new
Sec. 41.265.
Sections 26.273a, 26.301, and 27.138 set forth the transfer records
applicable to distilled spirits, wine, and beer withdrawn from customs
custody without payment of tax for delivery to specified TTB-bonded
facilities. Distilled spirits transfer records are currently covered by
OMB control number 1513-0056. The existing regulations only cover
distilled spirits transfer records; the proposed regulations add wine
and beer transfer records. For those who will file TTB data
electronically, the proposed regulations also require the reporting of
information from the transfer records with the CBP entry. The
information required to be recorded and reported, as applicable, under
the proposed regulations includes the following, with some variation
depending on the product: The date the record is prepared; the name and
address of the bonded premises receiving the distilled spirits, wine,
or beer from customs custody; the TTB-issued registry number of the
bonded premises receiving the distilled spirits, wine, or beer from
customs custody; the number of containers transferred and the quantity
in each container; the country of origin; the customs entry number and
amount of duty paid; and the foreign producer.
Current Sec. 26.205 requires that persons, other than tourists,
bringing liquors or articles under part 26 into the United States from
the Virgin Islands obtain a certificate from the manufacturer showing
certain information. TTB proposes to amend that section to specify that
a copy of the certificate must be retained along with other records
needed to substantiate the information in the certificate, and those
records must be made available upon request. Proposed Sec. 26.205 also
requires that the importers that file TTB data electronically must file
the information included on the certificate in accordance with the
provisions of Sec. 26.200.
This document also includes proposals to amend the regulations in
part 26 and 27 relating to records of shipments of industrial spirits,
specially denatured spirits, and completely denatured spirits. Section
26.292 requires that a copy of the consignee's permit for shipments of
industrial
[[Page 40421]]
spirits or specially denatured spirits brought into the United States
from the U.S. Virgin Islands be filed with CBP. The proposed amendment
to that section provides that the permit number be submitted
electronically, if the importer is filing TTB data electronically, and
must be made available upon request. As discussed below, amendments to
Sec. Sec. 26.294 and 26.296 require the reporting with the CBP entry
of the names and addresses of the consignor and the consignee and
consignor as well as the total quantity shipped.
Sections 26.318 and 27.208 address requirements related to liquor
bottles being imported or brought into the United States, and provide a
letterhead application process for importers that wish to bring into
the United States filled liquor bottles that do not conform to the
regulatory requirements in part 26. The proposed amendments specify
that the proof of authorization must be retained for a three-year
period and made available upon request.
TTB is also proposing to remove references to submissions of
information in triplicate. See Sec. Sec. 26.331, 27.209, and 27.221.
TTB is proposing to amend Sec. Sec. 27.76 and 27.77 regarding the
approval and certification of wine and flavors content and the approval
of a standard effective tax rate for importers. In both cases, the
amendments will remove the requirement that a TTB approval letter or
certificate be filed with CBP. Under the proposed regulations, the
approval letter or certificate would be made available upon request.
Proposed Sec. Sec. 27.76 and 27.77 also include record retention
requirements.
Finally, TTB is proposing to amend Sec. Sec. 26.276, 27.137, and
41.204, which currently set forth certain recordkeeping requirements
for all documents or copies of documents that support records required
by parts 26, 27, and 41, respectively. TTB proposes to amend sections
Sec. Sec. 26.276 and 27.137 to clarify that: (1) The length of time
for which the records must be kept is measured from the time of
withdrawal from customs custody; (2) the records must be made available
upon request of a customs officer or the appropriate TTB officer,
rather than made available during business hours as the texts of these
sections currently states; and (3) supporting documents that must be
kept include data filed with CBP pursuant to CBP requirements. TTB
proposes to amend Sec. 41.204 to provide that importers of tobacco
products and cigarette papers or tubes must keep records of such
products received and disposed of, but also of any of these products
released from customs custody under the importer's TTB permit. (Current
requirements of Sec. 41.204 are covered by OMB control number 1513-
0106. The proposed requirements are being submitted to OMB control
number 1513-0064.)
TTB believes that these proposed requirements are necessary to
ensure that:
Persons engaged in business as importers are operating
under the permit required by Federal law to engage in such operations;
Applicable taxes are paid;
Commodities released from customs custody without payment
of tax for transfer in bond are eligible for such release, are sent to
eligible bonded facilities, and are not diverted; and
Labels applied to containers of imported alcohol beverages
comply with FAA Act requirements.
TTB estimates that, as a result of the amendments, the new annual
burden hours associated with OMB control number 1513-0064 will change.
The new estimates are:
Estimated number of respondents: 10,521.
Estimated average annual burden hours: 21,042.
The revision of 1513-0064 generally consolidates the information
required of importers to be filed as part of the customs entry or entry
summary, or kept as a record relating to the entry or entry summary.
Such consolidation entails removing requirements that currently appear
in other information collections. TTB has submitted to OMB a revision
of OMB control number 1513-0056, TTB REC 5110/05, Distilled Spirits
Plants--Transaction and Supporting Records, to remove references to
Sec. Sec. 26.273a, 26.301, 27.138, and 27.172 that would now be
captured under OMB control number 1513-0064, as described above. The
estimated number of respondents (620) and estimated average annual
burden hours (13,516) for 1513-0056 remain unchanged.
In addition, TTB has submitted to OMB revisions of OMB control
numbers 1513-0059, TTB REC 5150/3, Usual and Customary Business Records
Relating to Tax-Free Alcohol, and 1513-0062, TTB REC 5150/1, Usual and
Customary Business Records Relating to Denatured Spirits. Proposed
amendments to the regulations at Sec. Sec. 26.294 and 26.296 allow
certain information relating to shipments from the U.S. Virgin Islands
of industrial spirits, specially denatured spirits or completely
denatured spirits to be filed electronically at the time of filing the
entry or entry summary, as appropriate. Regardless of the method of
filing, the record of shipment must be retained and be made available
upon request. These electronic submissions will be placed under OMB
control number 1513-0064. The estimated number of respondents for OMB
control number 1513-0059 (5,268) and for OMB control number 1513-0062
(3,430) and the estimated average annual burden hours for each (one,
for usual and customary business records) remain unchanged. TTB has
also submitted to OMB a revision of OMB control number 1513-0088, TTB
REC 5000/24, Alcohol, Tobacco, and Firearms Related Documents for Tax
Returns and Claims, to remove the information collections in Sec. Sec.
27.48, 27.137, and 41.81, which will now be included in revised OMB
control number 1513-0064. OMB control number 1513-0088 is also revised
to state that the information that must be maintained as a record
includes all supporting documents, including information submitted to
CBP to meet CBP requirements. Such information must be retained for
three years. The estimated number of respondents for OMB control number
1513-0088 (503,921) and the estimated average annual burden hours for
each (one, for usual and customary business records) remain unchanged.
As noted above, TTB has submitted the revised information
collection requirements to the OMB for review. Comments on these new
recordkeeping and reporting requirements should be sent to OMB at
Office of Management and Budget, Attention: Desk Officer for the
Department of the Treasury, Office of Information and Regulatory
Affairs, Washington, DC 20503 or by email to
[email protected]. A copy should also be sent to TTB by any
of the methods previously described. Comments on the information
collections should be submitted no later than August 22, 2016. Comments
are specifically requested concerning:
Whether the collections of information submitted to OMB
are necessary for the proper performance of the functions of the
Alcohol and Tobacco Tax and Trade Bureau, including whether the
information will have practical utility;
The accuracy of the estimated burdens associated with the
collections of information submitted to OMB;
How to enhance the quality, utility, and clarity of the
information to be collected;
How to minimize the burden of complying with the proposed
revisions of the collections of information, including the application
of automated collection techniques or other forms of information
technology; and
[[Page 40422]]
Estimates of capital or start-up costs and costs of
operation, maintenance, and purchase of services to provide
information.
Lists of Subjects
27 CFR Part 1
Administrative practice and procedure, Alcohol and alcoholic
beverages, Imports, Liquors, Packaging and containers, Warehouses,
Wine.
27 CFR Part 4
Advertising, Alcohol and alcoholic beverages, Customs duties and
inspection, Food additives, Imports, International agreements,
Labeling, Packaging and containers, Reporting and recordkeeping
requirements, Trade practices, Wine.
27 CFR Part 5
Advertising, Alcohol and alcoholic beverages, Customs duties and
inspection, Food additives, Grains, Imports, International agreements,
Labeling, Liquors, Packaging and containers, Reporting and
recordkeeping requirements, Trade practices.
27 CFR Part 7
Advertising, Alcohol and alcoholic beverages, Beer, Customs duties
and inspection, Food additives, Imports, Labeling, Packaging and
containers, Reporting and recordkeeping requirements, Trade practices.
27 CFR Part 26
Alcohol and alcoholic beverages, Caribbean Basin Initiative,
Claims, Customs duties and inspection, Electronic funds transfers,
Excise taxes, Packaging and containers, Puerto Rico, Reporting and
recordkeeping requirements, Surety bonds, Virgin Islands, Warehouses.
27 CFR Part 27
Alcohol and alcoholic beverages, Beer, Cosmetics, Customs duties
and inspection, Electronic funds transfers, Excise taxes, Imports,
Labeling, Liquors, Packaging and containers, Reporting and
recordkeeping requirements, Wine.
27 CFR Part 41
Cigars and cigarettes, Claims, Customs duties and inspection,
Electronic funds transfers, Excise taxes, Imports, Labeling, Packaging
and containers, Puerto Rico, Reporting and recordkeeping requirements,
Surety bonds, Tobacco, Virgin Islands, Warehouses.
Amendments to the Regulations
For the reasons discussed above in the preamble, TTB proposes to
amend 27 CFR parts 1, 4, 5, 7, 26, 27, and 41 as follows:
PART 1--BASIC PERMIT REQUIREMENTS UNDER THE FEDERAL ALCOHOL
ADMINISTRATION ACT, NONINDUSTRIAL USE OF DISTILLED SPIRITS AND
WINE, BULK SALES AND BOTTLING OF DISTILLED SPIRITS
0
1. The authority citation for part 1 continues to read as follows:
Authority: 27 U.S.C. 203, 204, 206, 211 unless otherwise noted.
0
2. Section 1.10 is amended by adding a definition of ``Malt beverage''
in alphabetical order to read as follows:
Sec. 1.10 Meaning of terms.
* * * * *
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. Standards applying to the use of processing
methods and flavors in malt beverage production appear in Sec. 7.11 of
this chapter.
* * * * *
0
3. Section 1.58 is revised to read as follows:
Sec. 1.58 Filing of permits.
Every person receiving a basic permit under the provisions of this
part must maintain the permit at the place of business covered by the
permit and make it available upon the request of the appropriate TTB
officer. Every person required to obtain a basic permit as an importer
under Sec. 1.20 must, when importing distilled spirits, wine, or malt
beverages under that permit and filing TTB data electronically, file
the number of the permit with U.S. Customs and Border Protection (CBP)
along with the filing of the customs entry. Regardless of the method of
filing, every importer must make the permit available upon request by
the appropriate TTB officer or a customs officer.
PART 4--LABELING AND ADVERTISING OF WINE
0
4. The authority citation for part 4 continues to read as follows:
Authority: 27 U.S.C. 205, unless otherwise noted.
0
5. Section 4.10 is amended by adding a definition of ``Customs
officer'' in alphabetical order to read as follows:
Sec. 4.10 Meaning of terms.
* * * * *
Customs officer. An officer of U.S. Customs and Border Protection
(CBP) or any agent or other person authorized by law to perform the
duties of such an officer.
* * * * *
0
6. Section 4.27 is amended by revising paragraph (c)(3) to read as
follows:
Sec. 4.27 Vintage wine.
* * * * *
(c) * * *
(3) The wine is of the vintage shown, the laws of the country of
origin regulate the appearance of vintage dates upon the labels of wine
produced for consumption within the country of origin, the wine has
been produced in conformity with those laws, and the wine would be
entitled to bear the vintage date if it had been sold within the
country of origin. The importer of the wine imported in bottles or the
domestic bottler of wine imported in bulk and bottled in the United
States must be able to demonstrate, upon request by the appropriate TTB
officer or a customs officer, that the wine is entitled to be labeled
with the vintage date.
0
7. Section 4.40 is amended by:
0
a. Revising paragraph (a);
0
b. Removing and reserving paragraph (b); and
0
c. Adding an Office of Management and Budget control number reference
at the end of the section.
The revision and addition read as follows:
Sec. 4.40 Label approval and release.
(a) Certificate of label approval. Wine, imported in containers, is
not eligible for release from customs custody for consumption, and no
person may remove such wine from customs custody for consumption,
unless the person removing the wine has obtained and is in possession
of a certificate of label approval (COLA) and the containers bear
labels identical to the labels appearing on the face of the
certificate, or labels with changes authorized by the form. Any person
removing wine in containers from customs custody for consumption must
first apply for and obtain a COLA covering the wine from the
appropriate TTB officer, and, if filing electronically, the importer
must file with U.S. Customs and Border Protection (CBP), at the time of
filing the customs entry, the TTB-assigned number of the valid
[[Page 40423]]
COLA that corresponds to the label on the brand or lot of wine to be
imported. If the importer is not filing electronically, the importer
must provide a copy of the COLA to CBP at time of entry. In addition,
the importer must provide a copy of the applicable COLA upon request by
the appropriate TTB officer or a customs officer. The COLA requirement
imposed by this section applies only to wine that is removed for sale
or any other commercial purpose. See 27 CFR 27.49, 27.74 and 27.75 for
labeling exemptions applicable to certain imported samples of wine.
* * * * *
Approved by the Office of Management and Budget under control
numbers 1513-0020 and 1513-0064)
0
8. Section 4.45 is amended by revising paragraph (a) and by adding
paragraph (c) and an Office of Management and Budget control number
reference at the end of the section to read as follows:
Sec. 4.45 Certificates of origin, identity, and proper cellar
treatment.
(a) Certificate of origin and identity. Wine imported in containers
is not eligible for release from customs custody for consumption, and
no person may remove such wine from customs custody for consumption,
unless that person has obtained, and is in possession of an invoice
accompanied by a certificate of origin issued by the appropriate
foreign government if that country requires the issuance of such a
certificate for wine exported from that country. The certificate must
have been issued by an official duly authorized by the foreign
government, and it must certify as to the identity of the wine and that
the wine has been produced in compliance with the laws of the foreign
country regulating the production of the wine for home consumption.
(b) * * *
(c) Retention of certificates. The importer of wine imported in
containers must retain for five years following the date of the removal
of the bottled wine from customs custody copies of the certificates
(and accompanying invoices, if required) required by paragraphs (a) and
(b) of this section, and must provide them upon request of the
appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control
numbers 1513-0064 and 1513-0119)
Sec. 4.46 [Removed]
0
9. Section 4.46 is removed.
0
10. Section 4.53 is added to subpart F to read as follows:
Sec. 4.53 Retention of certificates.
Wine that would be required under Sec. 4.45 to be covered by a
certificate of origin and identity and/or a certification of proper
cellar treatment and that is imported in bulk for bottling in the
United States may be removed for consumption from the premises where
bottled only if the bottler possesses a certificate of origin and
identity and/or a certification of proper cellar treatment of natural
wine applicable to the wine that provides the same information as a
certificate required under Sec. 4.45(a) and (b) would provide for like
wine imported in bottles. The bottler of wine imported in bulk must
retain for five years following the removal of such wine from the
bonded wine cellar where bottled copies of the certificates required by
Sec. 4.45(a) and (b), and must provide them upon request of the
appropriate TTB officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
0
11. Section 4.70 is amended by:
0
a. In paragraph (b)(3), removing the word ``or'' following the semi-
colon;
0
b. Redesignating paragraph (b)(4) as paragraph (b)(5);
0
c. Adding new paragraph (b)(4), and
0
d. Adding an Office of Management and Budget control number reference
at the end of the section.
The additions read as follows:
Sec. 4.70 Application.
* * * * *
(b) * * *
(4) Imported wine bottled or packed before January 1, 1979, and
certified as to such in a statement, available to the appropriate TTB
officer upon request, signed by an official duly authorized by the
appropriate foreign government; or
* * * * *
(Approved by the Office of Management and Budget under control
number 1513-0064)
PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS
0
12. The authority citation for part 5 continues to read as follows:
Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 205.
0
13. Section 5.11 is amended by adding a definition of ``Customs
officer'' in alphabetical order to read as follows:
Sec. 5.11 Meaning of terms.
* * * * *
Customs officer. An officer of U.S. Customs and Border Protection
(CBP) or any agent or other person authorized by law to perform the
duties of such an officer.
* * * * *
0
14. Section 5.45 is revised to read as follows:
Sec. 5.45 Application.
(a) Except as provided in paragraph (b) of this section, no person
engaged in business as a distiller, rectifier, importer, wholesaler, or
warehouseman and bottler, directly or indirectly, or through an
affiliate, shall sell or ship or deliver for sale or shipment, or
otherwise introduce in interstate or foreign commerce, or receive
therein or remove from customs custody any distilled spirits in bottles
unless such distilled spirits are bottled and packed in conformity with
Sec. Sec. 5.46 through 5.47a.
(b) Section 5.47a does not apply to:
(1) Imported distilled spirits in the original containers in which
entered into Customs custody on or before December 31, 1979 (or on or
before June 30, 1989 in the case of distilled spirits imported in 500
mL containers); or
(2) Imported distilled spirits bottled or packed prior to January
1, 1980 (or prior to July 1, 1989 in the case of distilled spirits in
500 mL containers) and certified as to such in a statement signed by an
official duly authorized by the appropriate foreign government.
(Sec. 5, 49 Stat. 981, as amended (27 U.S.C. 205); 26 U.S.C. 5301)
(Approved by the Office of Management and Budget under control
number 1513-0064)
Sec. 5.47a [Amended]
0
15. Section 5.47a is amended in paragraph (d) by removing the
parenthetical sentence at the end of the paragraph.
0
16. Section 5.51 is amended by:
0
a. Revising paragraph (a);
0
b. Removing and reserving paragraphs (b) and (d); and
0
c. Adding an Office of Management and Budget control number reference
at the end of the section.
The revision and addition read as follows:
Sec. 5.51 Label approval and release.
(a) Certificate of label approval. Distilled spirits, imported in
bottles, are not eligible for release from customs custody for
consumption, and no person may remove such distilled spirits from
customs custody for consumption, unless the person removing the
distilled spirits has obtained and is in possession of a certificate of
label approval (COLA) and the bottles bear labels identical to the
labels appearing on the face of the certificate, or labels with changes
authorized by the form. Any person removing distilled spirits in
bottles from customs custody for consumption must first apply for and
obtain a COLA
[[Page 40424]]
covering the distilled spirits from the appropriate TTB officer, and,
if filing electronically, the importer must file with U.S. Customs and
Border Protection (CBP), at the time of filing the customs entry, the
TTB-assigned identification number of the valid COLA that corresponds
to the label on the brand or lot of imported distilled spirits to be
imported. If the importer is not filing electronically, the importer
must provide a copy of the COLA to CBP at time of entry. In addition,
the importer must provide a copy of the applicable COLA upon request by
the appropriate TTB officer or a customs officer. The COLA requirement
imposed by this section applies only to distilled spirits that are
removed for sale or any other commercial purpose. See 27 CFR 27.49,
27.74 and 27.75 for labeling exemptions applicable to certain imported
samples of distilled spirits.
* * * * *
(Approved by the Office of Management and Budget under control
numbers 1513-0020 and 1513-0064)
0
17. Section 5.52 is amended by:
0
a. Revising paragraphs (a), (b), (c), the introductory text of
paragraph (d), and paragraph (e);
0
b. Adding paragraph (f); and
0
c. Adding an Office of Management and Budget control number reference
at the end of the section.
The revisions and additions read as follows:
Sec. 5.52 Certificates of age and origin.
(a) Scotch, Irish, and Canadian whiskies. (1) Scotch, Irish, and
Canadian whiskies, imported in bottles, are not eligible for release
from customs custody, and no person may remove such whiskies from
customs custody, unless that person has obtained and is in possession
of an invoice accompanied by a certificate of origin issued by an
official duly authorized by the British, Irish, or Canadian Government,
certifying:
(i) That the particular distilled spirits are Scotch, Irish, or
Canadian whisky, as the case may be;
(ii) That the distilled spirits have been manufactured in
compliance with the laws of the respective foreign governments
regulating the manufacture of whisky for home consumption; and
(iii) That the product conforms to the requirements of the Immature
Spirits Act of such foreign governments for spirits intended for home
consumption.
(2) In addition, an official duly authorized by the appropriate
foreign government must certify to the age of the youngest distilled
spirits in the bottle. The age certified shall be the period during
which, after distillation and before bottling, the distilled spirits
have been stored in oak containers.
(b) Brandy, Cognac, and rum. Brandy (other than fruit brandies of a
type not customarily stored in oak containers) or Cognac, imported in
bottles, is not eligible for release from customs custody for
consumption, and no person may remove such brandy or Cognac from
customs custody for consumption, unless the person so removing the
brandy or Cognac possesses a certificate issued by an official duly
authorized by the appropriate foreign country certifying that the age
of the youngest brandy or Cognac in the bottle is not less than two
years, or if age is stated on the label that none of the distilled
spirits are of an age less than that stated. Rum imported in bottles
that contain any statement of age is not eligible to be released from
customs custody for consumption, and no person may remove such rum from
customs custody for consumption, unless the person so removing the rum
possesses a certificate issued by an official duly authorized by the
appropriate foreign country, certifying to the age of the youngest rum
in the bottle. The age certified shall be the period during which,
after distillation and before bottling, the distilled spirits have been
stored in oak containers. If the label of any fruit brandy, not stored
in oak containers, bears any statement of storage in another type of
container, the brandy is not eligible for release from customs custody
for consumption, and no person may remove such brandy from customs
custody for consumption, unless the person so removing the brandy
possesses a certificate issued by an official duly authorized by the
appropriate foreign government certifying to such storage. Cognac,
imported in bottles, is not eligible for release from customs custody
for consumption, and no person may remove such Cognac from customs
custody for consumption, unless the person so removing the Cognac
possesses a certificate issued by an official duly authorized by the
French Government, certifying that the product is grape brandy
distilled in the Cognac region of France and entitled to be designated
as ``Cognac'' by the laws and regulations of the French Government.
(c) Tequila. (1) Tequila imported in bottles is not eligible for
release from customs custody for consumption, and no person may remove
such Tequila from customs custody for consumption, unless the person
removing such Tequila possesses a certificate issued by an official
duly authorized by the Mexican Government stating that the product is
entitled to be designated as Tequila under the applicable laws and
regulations of the Mexican Government.
(2) If the label of any Tequila imported in bottles contains any
statement of age, the Tequila is not eligible for release from customs
custody for consumption, and no person may remove such Tequila from
customs custody for consumption, unless the person removing the Tequila
possesses a certificate issued by an official duly authorized by the
Mexican Government as to the age of the youngest Tequila in the bottle.
The age certified shall be the period during which the Tequila has been
stored in oak containers after distillation and before bottling.
(d) Other whiskies. Whisky, as defined in Sec. 5.22(b)(1), (4),
(5), and (6), imported in bottles, is not eligible for release from
customs custody, and no person shall remove such whiskies from customs
custody unless that person has obtained and is in possession of a
certificate issued by an official duly authorized by the appropriate
foreign government certifying:
(1) * * *
(2) * * *
(e) Miscellaneous. Distilled spirits (other than Scotch, Irish, and
Canadian whiskies, and Cognac) imported in bottles are not eligible for
release from customs custody, and no person shall remove such spirits
from customs custody unless that person has obtained and is in
possession of an invoice accompanied by a certificate of origin issued
by an official duly authorized by the appropriate foreign government,
if the issuance of such certificates with respect to such distilled
spirits is required by the foreign government concerned, certifying as
to the identity of the distilled spirits and that the distilled spirits
have been manufactured in compliance with the laws of the respective
foreign government regulating the manufacture of such distilled spirits
for home consumption.
(f) Retention of certificates. The importer of distilled spirits
imported in bottles must retain for five years following the removal of
such spirits from customs custody copies of the certificates required
by paragraphs (a) through (e) of this section, and must provide them
upon request of the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
Sec. 5.53 [Removed]
0
18. Section 5.53 is removed.
0
19. Section 5.56 is revised to read as follows:
[[Page 40425]]
Sec. 5.56 Certificates of age and origin.
Distilled spirits that would be required under Sec. 5.52 to be covered
by a certificate of age and/or a certificate of origin and that are
imported in bulk for bottling in the United States may be removed from
the plant where bottled only if the bottler possesses a certificate of
age and/or a certificate of origin applicable to the spirits that
provides the same information as a certificate required under Sec.
5.52 would provide for like spirits imported in bottles. The bottler of
distilled spirits imported in bulk must retain for five years following
the removal of such spirits from the domestic plant where bottled
copies of the certificates required by Sec. 5.52(a) through (e), and
must provide them upon request of the appropriate TTB officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES
0
20. The authority citation for part 7 continues to read as follows:
Authority: 27 U.S.C. 205.
0
21. Section 7.10 is amended by adding a definition of ``Customs
officer'' in alphabetical order to read as follows:
Sec. 7.10 Meaning of terms.
* * * * *
Customs officer. An officer of U.S. Customs and Border Protection
(CBP) or any agent or other person authorized by law to perform the
duties of such an officer.
* * * * *
0
22. Section 7.31 is amended by:
0
a. Revising paragraph (a);
0
b. Removing and reserving paragraph (b); and
0
c. Adding an Office of Management and Budget control number reference
at the end of the section.
The revision and addition read as follows:
Sec. 7.31 Label approval and release.
(a) Certificate of label approval. Malt beverages, imported in
containers, are not eligible for release from customs custody for
consumption, and no person may remove such malt beverages from customs
custody for consumption, unless the person removing the malt beverages
has obtained and is in possession of a certificate of label approval
(COLA) and the containers bear labels identical to the labels appearing
on the face of the certificate, or labels with changes authorized by
the form. Any person removing malt beverages in containers from customs
custody for consumption must first apply for and obtain a COLA covering
the malt beverages from the appropriate TTB officer, and, if filing
electronically, the importer must file with U.S Customs and Border
Protection (CBP), at the time of filing the customs entry, the TTB-
assigned identification number of the valid COLA covering the label on
the brand or lot of malt beverages being imported. If the importer is
not filing electronically, the importer must provide a copy of the COLA
to CBP at time of entry. In addition, the importer must provide a copy
of the applicable COLA upon request by the appropriate TTB officer or a
customs officer. The COLA requirement imposed by this section applies
only to malt beverages that are removed for sale or any other
commercial purpose. See 27 CFR 27.49, 27.74, and 27.75 for labeling
exemptions applicable to certain imported malt beverages.
* * * * *
(Approved by the Office of Management and Budget under control
numbers 1513-0020 and 1513-0064)
PART 26--LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN
ISLANDS
0
23. The authority citation for part 26 is revised to read as follows:
Authority: 19 U.S.C. 81c; 26 U.S.C. 5001, 5007, 5008, 5010,
5041, 5051, 5061, 5111-5114, 5121, 5122-5124, 5131-5132, 5207, 5232,
5271, 5275, 5301, 5314, 5555, 6001, 6109, 6301, 6302, 6804, 7101,
7102, 7651, 7652, 7805; 27 U.S.C. 203, 205; 31 U.S.C. 9301, 9303,
9304, 9306.
Sec. 26.1 [Amended]
0
24. In Sec. 26.1, paragraph (c) is amended by adding the words ``, of
Virgin Islands wine in bulk containers from customs custody to a bonded
wine cellar qualified under part 24 of this chapter, and of Virgin
Islands beer in bulk containers from customs custody to a brewery
qualified under part 25 of this chapter'' before the semicolon at the
end of the paragraph.
0
25. Section 26.11 is amended by:
0
a. Adding in alphabetical order definitions of ``Bonded wine cellar''
and ``Brewery'';
0
b. Revising the definitions of ``Bulk container'', ``Customs officer'',
and ``Importer''; and
0
c. Adding in alphabetical order definitions of ``IRC registry number'',
``Natural wine'', and ``Proof liter''.
The revisions and additions read as follows:
Sec. 26.11 Meaning of terms.
* * * * *
Bonded wine cellar. Premises established under part 24 of this
chapter.
* * * * *
Brewery. The land and buildings described in the brewer's notice,
TTB Form 5130.10, where beer is to be produced and packaged.
Bulk container. When used in the context of distilled spirits, the
term ``bulk container'' means any container having a capacity larger
than one wine gallon. When used in the context of wine, the term ``bulk
container'' means any container having a capacity larger than 60
liters. When used in the context of beer, the term ``bulk container''
means any container having a capacity larger than one barrel of 31
gallons.
* * * * *
Customs officer. An officer of U.S. Customs and Border Protection
(CBP) or any agent or other person authorized by law to perform the
duties of such an officer.
* * * * *
Importer. Any person who brings distilled spirits, wines, or beer
into the United States from the Virgin Islands.
* * * * *
IRC registry number. The number assigned by TTB to each distilled
spirits plant, bonded wine cellar, taxpaid wine bottling house, bonded
wine warehouse, or brewery upon approval of an application made
pursuant to Internal Revenue Code of 1986 requirements (26 U.S.C. 5171,
5351-5353, or 5401).
* * * * *
Natural wine. The product of the juice or must of sound, ripe
grapes or other sound, ripe fruit (including berries) made with any
proper cellar treatment and containing not more than 21 percent by
weight (21 degrees Brix dealcoholized wine) of total solids. For
purposes of this definition, proper cellar treatment means a production
practice or procedure authorized for natural wine by part 24 of this
chapter, or, in the case of natural wine produced and imported subject
to an international agreement or treaty, those practices and procedures
acceptable to the United States under that agreement or treaty.
* * * * *
Proof liter. A liter of liquid at 60 degrees Fahrenheit which
contains 50 percent by volume of ethyl alcohol having a specific
gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60
degrees Fahrenheit as unity or the alcoholic equivalent thereof.
* * * * *
0
26. Section 26.200 is amended by adding paragraphs (d), (e), (f), and
(g), by revising the authority citation, and
[[Page 40426]]
by adding an Office of Management and Budget control number reference
at the end of the section, to read as follows:
Sec. 26.200 Taxable status.
* * * * *
(d) Internal revenue taxes payable on liquors brought into the
United States from the Virgin Islands are collected by U.S. Customs and
Border Protection (CBP) in accordance with CBP requirements. The tax
must be paid on the basis of a return, and the customs form (including
any electronic transmissions) by which the liquors are duty- and tax-
paid to CBP will be treated as a return for purposes of this part. The
person bringing such liquors into the United States, if filing
electronically, must file the information specified in this section
with the entry or entry summary, as appropriate, along with any other
information that is required by CBP to be filed with the entry or entry
summary for purposes of administering the provisions of the Internal
Revenue Code and Federal Alcohol Administration Act (FAA Act). Any
information required by this section that is also required by, and
filed with, CBP as part of the entry or entry summary for purposes of
meeting CBP requirements will satisfy the requirements of this section.
The following information is required as described under this section:
(1) The permit number of the valid importer permit issued under the
FAA Act and the regulations issued pursuant to the FAA Act (27 CFR part
1), if applicable, as required by 27 CFR 1.20 and 1.58, and the
importer's name, address, and employer identification number (EIN)
associated with that permit;
(2) The TTB-assigned number of the valid certificate of label
approval (COLA), if applicable, as required by 27 CFR 4.40 in the case
of wine, 27 CFR 5.51 in the case of distilled spirits, and 27 CFR 7.31
in the case of malt beverages;
(3) The name and address of the ultimate consignee;
(4) The quantity of each product (for distilled spirits, in proof
liters or proof gallons; for wine and beer, in liters or gallons); and
(5) Information identifying each product for Internal Revenue Code
and/or FAA Act purposes.
(e) Distilled spirits, natural wines, and beer in bulk containers
may be released from customs custody without payment of tax under the
provisions of subpart Oa of this part and thereafter removed subject to
tax from internal revenue bonded premises. The tax will be collected
and paid under the provisions of parts 19, 24, and 25 of this chapter,
respectively.
(f) Entry for warehousing.--(1) General. Except as provided in
paragraph (f)(2) of this section, in the case of an entry for
warehousing (that is, products transferred directly to a customs bonded
warehouse or foreign trade zone), the last day for payment of the tax
shall not be later than the 14th day after the last day of the
semimonthly period during which the products are removed from the first
such warehouse, even if the products have been removed from that
customs bonded warehouse or foreign trade zone for transfer to another
customs bonded warehouse or foreign trade zone.
(2) Entry for warehousing of products intended for export.
Paragraph (f)(1) of this section does not apply to any distilled
spirits, wines, or beer entered for warehousing and then removed for
transfer to another customs bonded warehouse or foreign trade zone that
is shown to the satisfaction of the Secretary to be destined for
export.
(g) Records. Regardless of the method of filing, the person
bringing the liquors into the United States must retain as a record the
information required by this section, any information provided to CBP
to meet CBP requirements, and any supporting documentation. These
records must be retained in accordance with the record retention
requirements of Sec. 26.276, and the records must be made available
upon request of the appropriate TTB officer or a customs officer.
(26 U.S.C. 5001, 5054, 5061, 5232, 5364, 5418, 7652)
(Approved by the Office of Management and Budget under control
number 1513-0064)
0
27. Section 26.201c is revised to read as follows:
Sec. 26.201c Shipments of distilled spirits, natural wine, and beer
to the United States without payment of tax.
Distilled spirits, natural wine, and beer may be brought into the
United States from the Virgin Islands in bulk containers without
payment of tax for transfer in bond from customs custody to the bonded
premises of a distilled spirits plant in the case of distilled spirits,
a bonded wine cellar in the case of natural wine, or a brewery in the
case of beer. Such shipments are subject to the provisions of subpart
Oa of this part.
0
28. Section 26.202 is revised to read as follows:
Sec. 26.202 Requirements of the Federal Alcohol Administration Act.
(a) General. The Federal Alcohol Administration Act (FAA Act) and
the regulations issued under the FAA Act (parts 1, 4, 5, and 7 of this
chapter) provide that any person, except an agency of a State or
political subdivision thereof or any officer or employee of any such
agency, who brings into the United States from the Virgin Islands
distilled spirits, wines, or malt beverages for nonindustrial use must
comply with the permit and labeling requirements described in this
section. See 27 CFR 1.10 for the definitions of distilled spirits,
wine, and malt beverages under the FAA Act. Tourists bringing distilled
spirits, wines, or malt beverages into the United States for personal
or other noncommercial use are not subject to the provisions of the FAA
Act or regulations issued pursuant to the FAA Act (parts 1, 4, 5, and 7
of this chapter).
(b) FAA Act basic permit. Any person, except an agency of a State
or a political subdivision thereof or any officer or employee of any
such agency, who intends to engage in the business of bringing
distilled spirits, wines, or malt beverages into the United States from
the Virgin Islands must, prior to bringing such products into the
United States, obtain an importer's basic permit, in accordance with
the requirements of the FAA Act and regulations issued pursuant to the
FAA Act, and must file with U.S. Customs and Border Protection (CBP)
the number associated with this permit when filing electronically as
required under 27 CFR 1.58. Also, as required under Sec. 1.58 of this
chapter, if the importer is not filing electronically, the importer
must have a copy of the FAA Act basic permit and make it available upon
request of the appropriate TTB officer or a customs officer.
(c) Certificate of label approval. Any person and any agency of a
State or political subdivision thereof or any officer or employee of
such agency, removing for commercial purposes containers of distilled
spirits, wines, or malt beverages from the Virgin Islands from customs
custody for consumption, when filing electronically, must provide the
TTB-assigned identification number of the valid certificate of label
approval (COLA) for the distilled spirits, wines, or malt beverages
with the filing of the customs entry, in accordance with the
requirements of 27 CFR 4.40 in the case of wine, 27 CFR 5.51 in the
case of distilled spirits, or 27 CFR 7.31 in the case of malt
beverages. Also, as required under 27 CFR 4.40, 5.51, and 7.31, if the
importer is not filing electronically, the importer must provide a copy
of the valid COLA to CBP at the time of entry.
(d) Foreign certificates. Any person and any agency of a State or
political subdivision thereof or any officer or employee of such
agency, bringing into
[[Page 40427]]
the United States from the Virgin Islands for commercial purposes and
for consumption containers of distilled spirits or wines that require a
certificate under 27 CFR 4.45(a) in the case of wine or 27 CFR 5.52 in
the case of distilled spirits must be in possession of the certificate
(and accompanying invoice, if applicable) at the time of release from
customs custody.
(Secs. 3, 5, 49 Stat. 978, as amended, 981, as amended; 27 U.S.C.
203, 205)
0
29. Section 26.205 is amended by:
0
a. Revising paragraph (b),
0
b. Adding paragraphs (c) and (d), and
0
c. Revising the Office of Management and Budget control number
reference at the end of the section.
The revisions and additions read as follows:
Sec. 26.205 Certificate.
* * * * *
(b) The person bringing the liquors into the United States must
file the information required under Sec. 26.200, in accordance with
that section.
(c) The person bringing liquors into the United States from the
Virgin Islands must maintain a copy of the certificate described in
paragraph (a) of this section along with records to substantiate the
information on the certificate, including information required under
Sec. 26.204, in accordance with the record retention requirements of
Sec. 26.276 and must make them available upon request of the
appropriate TTB officer or a customs officer.
(d) For distilled spirits, natural wine, or beer withdrawn from
customs custody under the provisions of subpart Oa of this part, the
importer must furnish a copy of the certificate to the proprietor of
the receiving distilled spirits plant, bonded wine cellar, or brewery.
(Approved by the Office of Management and Budget under control
number 1513-0064)
* * * * *
0
30. Section 26.260 is revised to read as follows:
Sec. 26.260 Required information.
Persons (except tourists) bringing liquors from the Virgin Islands
into the United States must file with U.S. Customs and Border
Protection, at the time of filing the entry or entry summary, as
appropriate, the information required under Sec. 26.200, in accordance
with that section, and provide any information collected by any gauge
under Sec. 26.204 and any information contained in the certificate
described in Sec. 26.205, upon request, in accordance with the
provisions of Sec. Sec. 26.204 and 26.205(c).
Sec. 26.261 [Removed and reserved]
0
31. Section 26.261 is removed and reserved.
0
32. Section 26.263 is revised to read as follows:
Sec. 26.263 Determination of tax on beer.
If the certificate prescribed in Sec. 26.205 covers beer, the beer
tax will be collected at the rates imposed by 26 U.S.C. 5051.
(68A Stat. 611, as amended; 26 U.S.C. 5051, 7652)
0
33. The authority citation at the end of Sec. 26.264 is revised to
read as follows:
Sec. 26.264 Determination of tax on wine.
* * * * *
(68A Stat. 609, as amended; 26 U.S.C. 5041, 7652)
Sec. 26.273 [Amended]
0
34. Section 26.273 is amended, after the word ``plants'', by adding ``,
bonded wine cellars, and breweries''.
0
35. Section 26.273a is revised to read as follows:
Sec. 26.273a Transfer record.
(a) Distilled spirits. The transfer record for Virgin Islands
spirits prescribed in Sec. 26.301 shall show the:
(1) Date prepared;
(2) Serial number of the transfer record, beginning with ``1'' each
January 1;
(3) Name of the proprietor and TTB-issued IRC registry number of
the plant to which consigned;
(4) Name and address of the consignor;
(5) Kind of spirits;
(6) Name of the producer;
(7) Age (in years, months and days) of the spirits;
(8) Proof of the spirits;
(9) Type and serial number of containers;
(10) Proof gallons of spirits in the shipment; and
(11) The customs entry number and amount of duty paid.
(b) Natural wine. The transfer record prescribed in Sec. 26.301
must identify the importer and show the following:
(1) The date prepared;
(2) The name and address of the bonded wine cellar receiving the
wine from customs custody;
(3) The TTB-issued IRC registry number of the bonded wine cellar
receiving the wine from customs custody;
(4) The number of containers transferred and quantity of wine in
each container;
(5) The country of origin of the wine;
(6) The customs entry number and amount of duty paid;
(7) The kind of wine; and
(8) The producer.
(c) Beer. The transfer record prescribed in Sec. 26.301 must
identify the importer and show the following:
(1) The date prepared;
(2) The name and address of the brewery receiving the beer from
customs custody;
(3) The TTB-issued IRC registry number of the brewery receiving the
beer from customs custody;
(4) The number of containers transferred and quantity of beer in
each container;
(5) The country of origin of the beer;
(6) The customs entry number and amount of duty paid;
(7) The kind of beer; and
(8) The brewer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))
0
36. Section 26.276 is amended by revising the first sentence and by
adding an OMB control number reference to the end of the section, to
read as follows:
Sec. 26.276 Retention.
All records required by this part, documents or copies of documents
supporting these records (including data filed with U.S. Customs and
Border Protection (CBP) pursuant to CBP requirements), and file copies
of reports required by this part, must be retained for not less than
three years from the date the shipment is released from customs custody
into the United States, and during this period must be made available
upon request of the appropriate TTB officer or a customs officer. * * *
(Approved by the Office of Management and Budget under control
numbers 1513-0064 and 1513-0088)
0
37. Section 26.292 is revised to read as follows:
Sec. 26.292 Consignee permit number.
If filing electronically, the consignor or consignee must file with
U.S. Customs and Border Protection the number associated with the
consignee's permit issued under part 20 of this chapter (for shipments
of specially denatured spirits) or part 22 of this chapter (for
shipments of industrial spirits), along with the customs entry. If not
filing electronically, the consignor or consignee must make the permit
available to the appropriate TTB officer or a customs officer upon
request.
(Approved by the Office of Management and Budget under control
number 1513-0064)
0
38. Section 26.294 is revised to read as follows:
[[Page 40428]]
Sec. 26.294 Record of shipment.
(a) Filing information with U.S. Customs and Border Protection.
Each person bringing industrial spirits or specially denatured spirits
into the United States from the Virgin Islands, who files
electronically, must file with U.S. Customs and Border Protection (CBP)
the information specified in this paragraph, with the entry or entry
summary, as appropriate. Any information required by this paragraph
that is also required by, and filed with, CBP as part of the entry or
entry summary for purposes of meeting CBP requirements will satisfy the
requirements of this paragraph. In addition to the consignee's permit
number or a copy of the consignee's permit as required by Sec. 26.292,
the following information is required:
(1) The name and address of the consignee;
(2) The name and address of the consignor; and
(3) The total quantity shipped.
(b) Maintaining the record of shipment. For each shipment of
industrial spirits or specially denatured spirits from the Virgin
Islands to the United States, the importer shall possess and maintain a
record of shipment. The record of shipment shall consist of an invoice,
bill of lading, or similar document that shows the information required
in paragraph (a) of this section, as well as the following:
(1) For each formula of specially denatured spirits, the formula
number prescribed by part 21 of this chapter;
(2) For each formula of specially denatured spirits, the total
quantity in liters or gallons and the serial numbers or package
identification numbers of containers; and
(3) For industrial spirits, the total quantity in proof liters or
proof gallons and the package identification numbers of containers.
(c) Retaining records and making them available upon request. The
person bringing industrial spirits or specially denatured spirits into
the United States from the Virgin Islands must maintain records to
substantiate the information required under paragraph (a) of this
section, and any information provided to CBP to meet CBP requirements,
in accordance with the record retention requirements of Sec. 26.276.
Such records also must be made available upon request of the
appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
0
39. Section 26.296 is revised to read as follows:
Sec. 26.296 Record of shipment.
(a) Filing information with U.S. Customs and Border Protection.
Each person bringing completely denatured alcohol or products made with
denatured spirits into the United States from the Virgin Islands, who
files electronically, must file with U.S. Customs and Border Protection
(CBP) the information specified in this paragraph with the entry or
entry summary, as appropriate. Any information required by this
paragraph that is also required by, and filed with, CBP as part of the
entry or entry summary for purposes of meeting CBP requirements will
satisfy the requirements of this paragraph. The following information
is required:
(1) The consignor's name and address;
(2) The consignee's name and address; and
(3) The total quantity shipped.
(b) Maintaining additional information as a record. For each
shipment of completely denatured alcohol or products made with
denatured spirits from the Virgin Islands to the United States, the
importer shall possess and maintain a record of shipment. The record of
shipment shall consist of an invoice, bill of lading, or similar
document that shows the information required under paragraph (a) of
this section, as well as the following:
(1) The capacity and number of containers;
(2) For each formulation of completely denatured alcohol, the words
``Virgin Islands Completely Denatured Alcohol'' and the formula number
prescribed by part 21 of this chapter; and
(3) For product made with denatured spirits, the name, trade name,
or brand name of the product.
(c) Retaining records and making them available upon request. The
person bringing completely denatured alcohol or products made with
denatured spirits into the United States from the Virgin Islands must
maintain records to substantiate the information required under
paragraph (a) of this section and records as required under paragraph
(b) of this section, and any information submitted to CBP to meet CBP
requirements, in accordance with the record retention requirements of
Sec. 26.276. Such records also must be made available upon request of
the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
Sec. 26.297 [Removed]
0
40. Section Sec. 26.297 and the undesignated center heading
immediately before it are removed.
Subpart Oa--Transfer of Virgin Islands Distilled Spirits, Natural
Wines, and Beer Without Payment of Tax, From Customs Custody to
Internal Revenue Bond
0
41. The heading of subpart Oa is revised as set forth above.
0
42. Section 26.300 is amended by:
0
a. Revising the section heading;
0
b. Removing ``(a)'' and ``(b)'' from the second sentence;
0
c. Designating the existing text as paragraph (a);
0
d. Adding a heading to newly designated paragraph (a); and
0
e. Adding paragraphs (b) and (c).
The revision and additions read as follows:
Sec. 26.300 General provisions.
(a) Transfer of bulk distilled spirits from customs custody to
bonded premises of a distilled spirits plant. * * *
(b) Transfer of bulk natural wine from customs custody to a bonded
wine cellar. Bulk natural wine, as defined in Sec. 26.11, brought into
the United States from the Virgin Islands may, under the provisions of
this subpart, be withdrawn by the proprietor of a bonded wine cellar
from customs custody and transferred in bond in bulk containers to the
bonded wine cellar, without payment of the internal revenue tax imposed
on such wine by 26 U.S.C. 7652. Wine so withdrawn and transferred to a
bonded wine cellar may be withdrawn from a bonded wine cellar's
internal revenue bond for any purpose authorized by 26 U.S.C. chapter
51, in the same manner as domestic wine. The proprietor of the bonded
wine cellar to which the wine is transferred becomes liable for the tax
on wine withdrawn from customs custody under 26 U.S.C. 5364. Upon
release of the wine from customs custody, the person bringing in the
wine is relieved of the liability for the tax.
(c) Transfer of beer from customs custody to brewery premises. Bulk
beer brought into the United States from the Virgin Islands may, under
the provisions of this subpart, be withdrawn by the proprietor of a
bonded brewery from customs custody and transferred in bulk containers
to the bonded brewery premises, without payment of the internal revenue
tax imposed on such beer by 26 U.S.C. 7652. Beer so withdrawn and
transferred to bonded brewery premises may be withdrawn
[[Page 40429]]
from a brewery's internal revenue bond for any purpose authorized by 26
U.S.C. chapter 51, in the same manner as domestic beer. The proprietor
of the bonded brewery to which the beer is transferred becomes liable
for the tax on beer withdrawn from customs custody under 26 U.S.C.
5418. Upon release of the beer from customs custody, the person
bringing in the beer from the Virgin Islands is relieved of the
liability for the tax.
0
43. Section 26.301 is revised to read as follows:
Sec. 26.301 Record of shipment.
(a) Preparation of records. (1) The importer bringing distilled
spirits, natural wines, or beer into the United States from the Virgin
Islands under this subpart must prepare a transfer record according to
Sec. 26.273a. A separate transfer record must be prepared for each
conveyance. The importer bringing in the distilled spirits, natural
wines, or beer must maintain these records and any additional records
necessary to substantiate the information provided under paragraph (b)
of this section, in accordance with the record retention requirements
of Sec. 26.276, and must make them available upon request of the
appropriate TTB officer or a customs officer. The importer must also
provide a copy of the record to the recipient, if the recipient is not
the importer.
(2) For distilled spirits, if the spirits are in packages, the
person bringing the spirits into the United States must be in
possession of a package gauge record for each bulk container, as
provided in Sec. 26.273b, at the time the distilled spirits are
withdrawn from customs custody. The package gauge record may be
prepared by the insular gauger at the time of their withdrawal from an
insular bonded warehouse, as provided in Sec. 26.204, or, if not
prepared by the insular gauger, the package gauge record must be
prepared by the insular consignor.
(b) Reporting information for release from customs custody. A
person bringing distilled spirits, natural wines, or beer into the
United States from the Virgin Islands under this subpart, if filing
electronically, must file with U.S. Customs and Border Protection (CBP)
the information specified in this section at the time of filing the
entry or entry summary, as appropriate, along with any other
information that is required by CBP to be filed with the entry or entry
summary for purposes of administering the provisions of the Internal
Revenue Code and Federal Alcohol Administration Act (FAA Act). Any
information required by this section that is also required by, and
filed with, CBP as part of the entry or entry summary for purposes of
meeting CBP requirements will satisfy the requirements of this section.
Regardless of the method of filing, the importer must retain all of the
information required by this section and any supporting documentation
and make it available for inspection by the appropriate TTB officer or
a customs officer. The following information is required:
(1) The number of the importer's basic permit issued under the FAA
Act and the regulations issued pursuant to the FAA Act (27 CFR part 1),
if applicable, as required by 27 CFR 1.20, and the importer's employer
identification number (EIN) associated with that permit;
(2) The name and address of the ultimate consignee;
(3) The TTB-issued IRC registry number of the ultimate consignee;
(4) The quantity of each distilled spirit, natural wine, or beer in
the shipment (in proof liters or proof gallons, for distilled spirits);
and
(5) Information identifying each product for Internal Revenue Code
and/or FAA Act purposes.
(c) The importer bringing the distilled spirits, wines, or beer
into the United States must maintain records to substantiate the
information required under paragraph (b) of this section in accordance
with the record retention requirements of Sec. 26.276 and must provide
them upon request of the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
Sec. 26.302 [Removed and Reserved]
0
44. Section 26.302 is removed and reserved.
Sec. 26.303 [Removed and Reserved]
0
45. Section 26.303 is removed and reserved.
Sec. 26.314 [Amended]
0
46. In Sec. 26.314:
0
a. Redesignate paragraphs (b)(1) through (5) as (b)(1)(i) through (v);
0
b. Designate the text after the paragraph (b) heading as new paragraph
(b)(1);
0
c. Designate the undesignated concluding paragraph as paragraph (b)(2)
and remove the last sentence; and
0
d. Remove the Office of Management and Budget control number reference
from the end of the section and add in its place the Office of
Management and Budget control number reference ``(Approved by the
Office of Management and Budget under control number 1513-0020)''.
0
47. Section 26.316 is revised to read as follows:
Sec. 26.316 Bottles not constituting approved containers.
The appropriate TTB officer is authorized to disapprove any bottle,
including a bottle of less than 200 mL capacity, for use as a liquor
bottle which he determines to be deceptive. Disapproved bottles may not
be brought into the United States from the U.S. Virgin Islands or from
Puerto Rico.
0
48. Section 26.318 is revised to read as follows:
Sec. 26.318 Liquor bottles not eligible to be brought into the United
States.
(a) General. Except as provided in paragraph (b) of this section,
filled liquor bottles that do not conform to the provisions of this
subpart may not be brought into the United States from Puerto Rico or
the Virgin Islands.
(b) Exception. Upon receipt of a letterhead application, the
appropriate TTB officer may, in nonrecurring cases, authorize a person
to bring into the United States liquor bottles that do not conform to
the provisions of this part if that TTB officer determines that the
nonconformance is due to an unintentional error; the nonconforming
liquor bottle is determined not to be deceptive, as provided in Sec.
26.316; and the entry of the nonconforming liquor bottle will not
jeopardize the revenue. The person bringing such liquor bottles into
the United States under such TTB authorization must maintain for not
less than three years from the date that the liquor bottles were
released from customs custody proof of that authorization and make it
available upon request by the appropriate TTB officer or a customs
officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
Sec. 26.319 [Amended]
0
49. Section 26.319 is amended by:
0
a. Removing the words ``filed in triplicate''; and
0
b. Removing ``Sec. 31.263'' and adding in its place ``Sec. 31.203''.
Sec. 26.331 [Amended]
0
50. Section 26.331 is amended by removing the words ``, in
triplicate,'' and by revising the Office of Management and Budget
control number reference at the end of the section to read, ``(Approved
by the Office of Management and Budget under control number 1513-
0064)''.
[[Page 40430]]
PART 27--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER
0
51. The authority citation for part 27 is revised to read as follows:
Authority: 5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C. 5001,
5007, 5008, 5010, 5041, 5051, 5054, 5061, 5121, 5122-5124, 5201,
5205, 5207, 5232, 5273, 5301, 5313, 5382, 5555, 6109, 6302, 7805.
0
52. Section 27.11 is amended by:
0
a. Adding in alphabetical order definitions of ``Bonded wine cellar''
and ``Brewery'';
0
b. Revising the definitions of ``Bulk container'' and ``Customs
officer'';
0
c. Removing the definition of ``District director of customs''; and
0
d. Adding in alphabetical order definitions of ``IRC registry number'',
``Natural wine'', and ``Proof liter''.
The revisions and additions read as follows:
Sec. 27.11 Meaning of terms.
* * * * *
Bonded wine cellar. Premises established under part 24 of this
chapter.
Brewery. The land and buildings described in the brewer's notice,
TTB Form 5130.10, where beer is to be produced and packaged.
Bulk container. When used in the context of distilled spirits, the
term ``bulk container'' means any container having a capacity larger
than one wine gallon. When used in the context of wine, the term ``bulk
container'' means any container having a capacity larger than 60
liters. When used in the context of beer, the term ``bulk container''
means any container having a capacity larger than one barrel of 31
gallons.
* * * * *
Customs officer. An officer of U.S. Customs and Border Protection
(CBP) or any agent or other person authorized by law to perform the
duties of such an officer.
* * * * *
IRC registry number. The number assigned by TTB to each distilled
spirits plant, bonded wine cellar, taxpaid wine bottling house, bonded
wine warehouse, or brewery upon approval of an application made
pursuant to Internal Revenue Code of 1986 requirements (26 U.S.C. 5171,
5351-5353, or 5401).
* * * * *
Natural wine. The product of the juice or must of sound, ripe
grapes or other sound, ripe fruit (including berries) made with any
proper cellar treatment and containing not more than 21 percent by
weight (21 degrees Brix dealcoholized wine) of total solids. For
purposes of this definition, proper cellar treatment means a production
practice or procedure authorized for natural wine by part 24 of this
chapter, or, in the case of natural wine produced and imported subject
to an international agreement or treaty, those practices and procedures
acceptable to the United States under that agreement or treaty.
* * * * *
Proof liter. A liter of liquid at 60 degrees Fahrenheit which
contains 50 percent by volume of ethyl alcohol having a specific
gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60
degrees Fahrenheit as unity or the alcoholic equivalent thereof.
* * * * *
0
53. Section 27.48 is revised to read as follows:
Sec. 27.48 Imported distilled spirits, wines, and beer.
(a) Distilled spirits, wines, and beer imported subject to tax--(1)
General. Internal revenue taxes payable on imported distilled spirits,
wines, and beer are collected, accounted for, and deposited as internal
revenue collections by U.S. Customs and Border Protection (CBP) in
accordance with CBP requirements. The tax must be paid on the basis of
a return, and the customs form (including any electronic transmissions)
by which the distilled spirits, wines, or beer are duty- and tax-paid
to CBP will be treated as a return for purposes of this part.
(2) Required information. In the case of distilled spirits, wines,
and beer imported into the United States subject to tax, the importer,
if filing electronically, must file the information specified in this
section with the entry or entry summary, as appropriate, along with any
other information that is required by CBP to be filed with the entry or
entry summary for purposes of determining and collecting the Federal
excise tax and administering the provisions of the Internal Revenue
Code and Federal Alcohol Administration Act (FAA Act). Any information
required by this section that is also required by, and filed with, CBP
as part of the entry or entry summary for purposes of meeting CBP
requirements will satisfy the requirements of this section. For all
distilled spirits, wines, and beer imported under this paragraph, the
following information is required:
(i) The number of the importer's basic permit issued under the FAA
Act and the regulations issued pursuant to the FAA Act (27 CFR part 1),
if applicable, as required by 27 CFR 1.20 and 1.58, and the importer's
name, address, and employer identification number (EIN) associated with
that permit;
(ii) The TTB-assigned number of the valid certificate of label
approval (COLA), if applicable, as required by 27 CFR 4.40 in the case
of wine, 27 CFR 5.51 in the case of distilled spirits, and 27 CFR 7.31
in the case of malt beverages;
(iii) The name and address of the ultimate consignee;
(iv) The quantity of each product (for distilled spirits, in proof
liters or proof gallons; for beer and wine, in gallons or liters); and
(v) Information identifying each product for Internal Revenue Code
and/or FAA Act purposes, as applicable.
(b) Distilled spirits, natural wines, and beer transferred without
payment of tax to internal revenue bond. Distilled spirits, natural
wine (as defined in Sec. 27.11) and beer in bulk containers may be
released from customs custody without payment of tax under the
provisions of subpart L of this part and thereafter removed subject to
tax from distilled spirits plants, bonded wine cellars, and breweries,
respectively. The tax will be collected and paid under the provisions
of part 19, 24 or 25 of this chapter, respectively.
(c) Entry for warehousing--(1) General. Except as provided in
paragraph (c)(2) of this section, in the case of an entry for
warehousing (that is, products transferred directly to a customs bonded
warehouse or foreign trade zone), the last day for payment of the tax
shall not be later than the 14th day after the last day of the
semimonthly period during which the products are removed from the first
such warehouse, even if the products are removed from that customs
bonded warehouse or foreign trade zone for transfer to another customs
bonded warehouse or foreign trade zone.
(2) Entry for warehousing of products destined for export.
Paragraph (c)(1) of this section does not apply to any distilled
spirits, wines, or beer entered for warehousing and then removed for
transfer to another custom bonded warehouse or foreign trade zone that
is shown to the satisfaction of the Secretary to be destined for
export.
(d) Records. Regardless of the method of filing, the importer must
maintain as a record the information required by this section, any
information provided to CBP to meet CBP requirements, and any
supporting documentation. These records must be maintained in
accordance with the record retention requirements of Sec. 27.137, and
the records must be made available upon request of the appropriate TTB
officer or a customs officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
[[Page 40431]]
(26 U.S.C. 5001, 5054, 5061, 5232, 5364, 5418)
0
54. Section 27.55 and the undesignated center heading preceding it are
revised to read as follows:
Federal Alcohol Administration Act Requirements for Importation of
Distilled Spirits, Wines, and Malt Beverages
Sec. 27.55 Requirements of the Federal Alcohol Administration Act.
(a) General. The Federal Alcohol Administration Act (FAA Act) and
the regulations issued under the FAA Act (parts 1, 4, 5, and 7 of this
chapter) provide that any person, except an agency of a State or
political subdivision thereof or any officer or employee of any such
agency, who imports distilled spirits, wines, or malt beverages for
nonindustrial use must comply with certain permit and labeling
requirements as described in this section. See 27 CFR 1.10 for the
definitions of distilled spirits, wine, and malt beverages under the
FAA Act. Tourists importing distilled spirits, wines, or malt beverages
into the United States for personal or other noncommercial use are not
subject to the provisions of the FAA Act or regulations issued pursuant
to the FAA Act (parts 1, 4, 5, and 7 of this chapter).
(b) FAA Act basic permit. Any person, except an agency of a State
or a political subdivision thereof or any officer or employee of any
such agency, who intends to engage in the business of importing
distilled spirits, wines, or malt beverages into the United States
must, prior to importing such products into the United States, obtain
an importer's basic permit, in accordance with the requirements of the
FAA Act and regulations issued pursuant to the FAA Act, and must file
with U.S. Customs and Border Protection (CBP) the number associated
with this permit with the filing of the customs entry when filing
electronically as required under 27 CFR 1.58. Also, as required under
Sec. 1.58 of this chapter, if the importer is not filing
electronically, the importer must have a copy of the FAA Act basic
permit and make it available upon request of the appropriate TTB
officer or a customs officer.
(c) Certificate of label approval. Any person and any agency of a
State or political subdivision thereof or any officer or employee of
such agency, removing for commercial purposes containers of distilled
spirits, wines, or malt beverages from customs custody for consumption,
when filing electronically, must provide the TTB-assigned
identification number of the valid certificate of label approval (COLA)
for the distilled spirits, wines, or malt beverages with the filing of
the customs entry in accordance with the requirements of 27 CFR 4.40 in
the case of wine, 27 CFR 5.51 in the case of distilled spirits, or 27
CFR 7.31 in the case of malt beverages. Also, as required under 27 CFR
4.40, 5.51, and 7.31, if the importer is not filing electronically, the
importer must provide a copy of the valid COLA to CBP at time of entry.
(d) Foreign certificates. Every person and any agency of a State or
political subdivision thereof or any officer or employee of such
agency, importing for commercial purposes into the United States for
consumption containers of distilled spirits or wines that require a
certificate under 27 CFR 4.45 in the case of wine or 27 CFR 5.52 in the
case of distilled spirits must be in possession of the certificate (and
accompanying invoice, if applicable) at the time of release from
customs custody.
(Sec. 3, 49 Stat. 978, as amended; 27 U.S.C. 203)
0
55. Section 27.76 is amended by:
0
a. In paragraph (a), by removing ``TTB Form 5530.5 (1678)'' and adding
in its place ``TTB Form 5154.1 (formerly TTB Form 5530.5 and ATF Form
1678)'';
0
b. Revising paragraph (d);
0
c. Adding paragraph (e); and
0
d. Revising the OMB control number reference at the end of the section.
The revision and additions read as follows:
Sec. 27.76 Approval and certification of wine and flavors content.
* * * * *
(d) At the time of filing the entry summary, the importer must have
the certificate in its possession and make it available upon request of
the appropriate TTB officer or a customs officer. For distilled spirits
withdrawn from customs custody under the provisions of subpart L of
this part, the importer must furnish a copy of the certificate to the
proprietor of the distilled spirits plant to which the distilled
spirits are transferred.
(e) The importer must maintain a copy of the certificate in
accordance with the record retention requirements of Sec. 27.137 and
must make it available upon request of the appropriate TTB officer or a
customs officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
* * * * *
0
56. Section 27.77 is amended by:
0
a. Revising the second sentence of paragraph (d);
0
b. Adding paragraphs (e) and (f); and
0
c. Revising the OMB control number reference at the end of the section.
The revisions and additions read as follows:
Sec. 27.77 Standard effective tax rate.
* * * * *
(d) * * * At the time of filing the entry summary, the importer
must have the approval in its possession and make it available upon
request of the appropriate TTB officer or a customs officer. * * *.
(e) The importer must maintain a copy of the approval in accordance
with the record retention requirements of Sec. 27.137 and must make it
available upon request of the appropriate TTB officer.
(f) For distilled spirits withdrawn from customs custody under the
provisions of subpart L of this part, the importer must furnish a copy
of the approval to the proprietor of the distilled spirits plant to
which the distilled spirits are transferred.
(Approved by the Office of Management and Budget under control
number 1513-0064)
Sec. 27.120 [AMENDED]
0
57. In Sec. 27.120, remove ``Regulation 3 (27 CFR part 3)'' and add
``subpart E of part 1 of this chapter'' in its place.
0
58. In Sec. 27.137, the first sentence is revised and an Office of
Management and Budget control number reference is added at the end of
the section to read as follows:
Sec. 27.137 Retention.
All records required by this part, documents or copies of documents
supporting these records (including data filed with U.S. Customs and
Border Protection (CBP) pursuant to CBP requirements), and file copies
of reports required by this part, must be retained for not less than
three years following each withdrawal from customs custody, and during
this period must be made available upon request of the appropriate TTB
officer or a customs officer.
* * * * *
(Approved by the Office of Management and Budget under control
number 1513-0064 and 1513-0088)
0
59. Section 27.138 is revised to read as follows:
Sec. 27.138 Transfer record.
(a) Distilled spirits. The transfer record prescribed in Sec.
27.172 must identify the importer and show the following:
(1) The date prepared;
(2) Serial number of the transfer record, beginning with ``1'' each
January 1;
[[Page 40432]]
(3) The name, address, and TTB-issued IRC registry number
(distilled spirits plant number) of the proprietor receiving the
spirits from customs custody;
(4) The country of origin of the distilled spirits;
(5) The name of the foreign producer;
(6) The kind of spirits;
(7) The age, in years, months and days of the spirits;
(8) The proof of the spirits;
(9) The type and number of containers;
(10) The proof gallons of spirits in the shipment; and
(11) The customs entry number and the amount of duty paid.
(b) Wine. The transfer record prescribed in Sec. 27.172 must
identify the importer and show the following:
(1) The date prepared;
(2) The name and address of the bonded wine cellar receiving the
wine from customs custody;
(3) The TTB-issued IRC registry number of the bonded wine cellar
receiving the wine from customs custody;
(4) The number of containers transferred and quantity of wine in
each container;
(5) The country of origin of the wine;
(6) The customs entry number and amount of duty paid;
(7) The kind of wine; and
(8) The foreign producer.
(c) Beer. The transfer record prescribed in Sec. 27.172 must
identify the importer and show the following:
(1) The date prepared;
(2) The name and address of the brewery receiving the beer from
customs custody;
(3) The TTB-issued IRC registry number of the brewery receiving the
beer from customs custody;
(4) The number of containers transferred and quantity of beer in
each container;
(5) The country of origin of the beer;
(6) The customs entry number and the amount of duty paid;
(7) The kind of beer; and
(8) The foreign brewer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
0
60. Section 27.140 is amended by:
0
a. Removing from paragraph (a) the definitions of ``Importer'' and
``Natural wine'';
0
b. Revising in paragraph (a) the definition of ``Proper cellar
treatment'';
0
c. Revising the introductory text of paragraph (b)(1), and
0
d. Adding an Office of Management and Budget control number reference
at the end of the section.
The revisions and addition read as follows:
Sec. 27.140 Certification requirements for wine.
(a) * * *
Proper cellar treatment means a production practice or procedure
authorized for natural wine by part 24 of this chapter, or, in the case
of natural wine produced and imported subject to an international
agreement or treaty, those practices and procedures acceptable to the
United States under that agreement or treaty.
(b) * * * (1) General. Except as otherwise provided in paragraph
(b)(2) of this section, an importer of natural wine must have an
original or copy of a certification from the producing country stating
that the practices and procedures used to produce the imported wine
constitute proper cellar treatment. The importer of bottled wine must
be in possession of the certificate at the time of filing the entry
with CBP, and the bottler of bulk wine must be in possession of the
certificate at the time the wine is withdrawn from the premises where
bottled. The importer or bottler, as appropriate, must provide the
certificate upon request by the appropriate TTB officer or a customs
officer. This requirement may be satisfied by providing the original
certification, or a photocopy or electronic copy of the certification.
The appropriate TTB officer or a customs officer may request, and the
importer or bottler must provide, such information for a period of
three years from the date that the product covered by the certificate
was released from customs custody or removed from the bottler's
premises, as applicable. The certification:
* * * * *
(Approved by the Office of Management and Budget under control
numbers 1513-0064 and 1513-0119)
0
61. The heading of subpart L is revised to read as follows:
Subpart L--Transfer of Distilled Spirits, Natural Wines, and Beer
Without Payment of Tax, From Customs Custody to Internal Revenue
Bond
0
62. Section 27.171 is amended by:
0
a. Removing ``(a)'' and ``(b)'' from the second sentence;
0
b. Designating the existing text as paragraph (a);
0
c. Adding a heading to paragraph (a);
0
d. Adding paragraphs (b) and (c); and
0
e. Revising the authority citation at the end of the section.
The additions and revision read as follows:
Sec. 27.171 General provisions.
(a) Transfer of bulk distilled spirits from customs custody to
bonded premises of a distilled spirits plant. * * *
(b) Transfer of bulk natural wine from customs custody to a bonded
wine cellar. Imported ``natural wine,'' as defined in Sec. 27.11, may,
under the provisions of this subpart, be withdrawn in bulk by the
proprietor of a bonded wine cellar from customs custody and transferred
in bulk containers to the bonded wine cellar without payment of the
internal revenue tax imposed on wine by 26 U.S.C. 5041. Imported wine
so withdrawn and transferred may be withdrawn from a bonded wine
cellar's internal revenue bond for any purpose authorized by 26 U.S.C.
chapter 51, in the same manner as domestic wine. The proprietor of the
bonded wine premises to which imported wine is transferred becomes
liable for the tax on wine withdrawn from customs custody under 26
U.S.C. 5364. Upon release of the wine from customs custody, the
importer is relieved of the liability for the tax.
(c) Transfer of beer from customs custody to a brewery. Imported
bulk beer may, under the provisions of this subpart, be withdrawn by
the proprietor of bonded brewery from customs custody and transferred
in bulk containers to bonded brewery premises, without payment of the
internal revenue tax imposed on beer by 26 U.S.C. 5051. Imported beer
so withdrawn and transferred to bonded brewery premises may be
withdrawn from a brewery's internal revenue bond for any purpose
authorized by 26 U.S.C. chapter 51, in the same manner as domestic
beer. The proprietor operating the bonded brewery premises to which
imported beer is transferred becomes liable for the tax on beer
withdrawn from customs custody under 26 U.S.C. 5418. Upon release of
the beer from customs custody, the importer is relieved of the
liability for the tax.
(26 U.S.C. 5232, 5364, and 5418)
0
63. Section 27.172 is revised to read as follows:
Sec. 27.172 Preparation of records and reporting of information for
release of distilled spirits, natural wines, and beer without payment
of tax.
(a) Preparation of records. (1) The person importing distilled
spirits, natural wines, or beer under this subpart must prepare a
transfer record according to Sec. 27.138. A separate transfer record
must be prepared for
[[Page 40433]]
each conveyance. The importer must maintain these records and any
records to substantiate the information required under paragraph (b) of
this section, in accordance with the record retention requirements of
Sec. 27.137, and must make them available upon request of the
appropriate TTB officer or a customs officer. The importer must also
provide a copy of the record to the recipient, if the recipient is not
the importer.
(2) For distilled spirits, if the spirits are in packages, the
importer must prepare a package gauge record according to Sec. 27.139
and maintain it with the transfer record.
(b) Reporting information for release from customs custody. In the
case of distilled spirits, natural wines, and beer imported into the
United States without payment of tax under this subpart, the importer,
if filing electronically, must file with U.S. Customs and Border
Protection (CBP) the information specified in this section at the time
of filing the entry or entry summary, as appropriate, along with any
other information that is required by CBP to be filed with the entry or
entry summary for purposes of administering the provisions of the
Internal Revenue Code and Federal Alcohol Administration Act (FAA Act).
Any information required by this section that is also required by, and
filed with, CBP as part of the entry or entry summary for purposes of
meeting CBP requirements will satisfy the requirements of this section.
Regardless of the method of filing, the importer must retain as a
record the information required by this section, any information
provided to CBP to meet CBP requirements, and any supporting
documentation and make such records available for inspection by the
appropriate TTB officer or a customs officer. The following information
is required:
(1) The number of the importer's basic permit issued under the FAA
Act and the regulations issued pursuant to the FAA Act (27 CFR part 1),
if applicable, as required by 27 CFR 1.20, and the importer's employer
identification number (EIN) associated with that permit;
(2) The name and address of the ultimate consignee;
(3) The TTB-issued IRC registry number of the ultimate consignee;
(4) The quantity of each distilled spirit, wine, or beer in the
shipment (in proof liters or proof gallons, for distilled spirits); and
(5) Information identifying each product for Internal Revenue Code
and/or FAA Act purposes.
(Approved by the Office of Management and Budget under control
number 1513-0064)
Sec. 27.173 [Removed and Reserved]
0
64. Section 27.173 is removed and reserved.
0
65. In Sec. 27.175, the section heading is revised to read as follows:
Sec. 27.175 Receipt of distilled spirits by consignee.
* * * * *
0
66. Section 27.183 is revised to read as follows:
Sec. 27.183 Use of Government agency permit, Form 5150.33.
Each Government agency must retain the original of its permit, Form
5150.33, on file. In the case of an agency holding a single permit for
use of its sub-agencies, an attachment to the permit must list all
locations authorized to withdraw spirits free of tax from customs
custody. When withdrawing spirits free of tax from a port of entry, the
agency, if filing electronically, must file its TTB-issued permit
number along with the filing of any other information required by U.S.
Customs and Border Protection to be filed with the customs entry. If
the agency is not filing electronically, rather than file the TTB-
issued permit number, the agency must make a copy of the permit
available to the customs officer upon request.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C.
5313))
0
67. Section 27.184 is revised to read as follows:
Sec. 27.184 Information required for entry.
Government agencies importing tax-free spirits under this subpart
must file, along with filing the customs entry or entry summary, the
total quantity of the spirits to be entered and, if filing
electronically, the permit number as required under Sec. 27.183.
Sec. 27.185 [Removed]
0
68. Section 27.185 is removed.
Sec. 27.204 [Amended]
0
69. Section 27.204 is amended by:
0
a. Redesignating paragraphs (b)(1) through (5) as (b)(1)(i) through
(v);
0
b. Designate the text after the paragraph (b) heading as new paragraph
(b)(1);
0
c. Designating the undesignated concluding paragraph as paragraph
(b)(2) and removing the last sentence; and
0
d. Adding an Office of Management and Budget control number reference
to read ``(Approved by the Office of Management and Budget under
control number 1513-0020)'' at the end of the section.
0
70. Section 27.206 is amended by revising the last sentence to read as
follows:
Sec. 27.206 Bottles not constituting approved containers.
* * * Disapproved bottles may not be imported into the United
States.
0
71. Section 27.208 is revised to read as follows:
Sec. 27.208 Liquor bottles not eligible for release from customs
custody.
Upon receipt of a letterhead application, the appropriate TTB
officer may, in nonrecurring cases, authorize a person to bring into
the United States liquor bottles that do not conform to the provisions
of this part if that TTB officer determines that the nonconformance is
due to an unintentional error; the nonconforming liquor bottle is
determined not to be deceptive, as provided in Sec. 27.206; and the
entry of the nonconforming liquor bottle will not jeopardize the
revenue. The person bringing such liquor bottles into the United States
under TTB authorization must maintain proof of such authorization for
not less than three years from the date that the liquor bottles were
released from customs custody and make it available upon request by the
appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control
number 1513-0064)
Sec. 27.209 [Amended]
0
72. Section 27.209 is amended by removing the words ``filed in
triplicate''; by removing ``Sec. 31.263'' and adding in its place
``Sec. 31.203'' and by removing the Office of Management and Budget
control number reference at the end of the section and adding in its
place the Office of Management and Budget control number reference
``(Approved by the Office of Management and Budget under control number
1513-0064)''.
Sec. 27.221 [Amended]
0
73. Section 27.221 is amended in the introductory text of paragraph (a)
by removing the words ``, in triplicate,'' and by removing the Office
of Management and Budget control number reference at the end of the
section and adding in its place the Office of Management and Budget
control number reference ``(Approved by the Office of Management and
Budget under control number 1513-0064)''.
[[Page 40434]]
PART 41--IMPORTATION OF TOBACCO PRODUCTS, CIGARETTE PAPERS AND
TUBES, AND PROCESSED TOBACCO
0
74. The authority citation for part 41 is revised to read as follows:
Authority: 26 U.S.C. 5701-5705, 5708, 5712, 5713, 5721-5723,
5741, 5754, 5761-5763, 6301, 6109, 6302, 6313, 6402, 6404, 7101,
7212, 7342, 7606, 7651, 7652, 7805; 31 U.S.C. 9301, 9303, 9304,
9306.
0
75. Section 41.11 is amended by revising the definition of ``Customs
officer'' to read as follows:
Sec. 41.11 Meaning of terms.
* * * * *
Customs officer. An officer of U.S. Customs and Border Protection
(CBP) or any agent or other person authorized by law to perform the
duties of such an officer.
* * * * *
0
76. Section 41.81 is amended by revising paragraphs (b) and (c) and
adding an Office of Management and Budget control number reference at
the end of the section to read as follows:
Sec. 41.81 Taxpayment.
* * * * *
(b) Method of payment. Except for articles imported or brought into
the United States as provided in Sec. Sec. 41.85 and 41.85a, the
internal revenue tax must be determined before the tobacco products,
cigarette papers, or cigarette tubes are released from customs custody.
The tax must be paid on the basis of a return, and the customs form
(including any electronic transmissions) by which the tobacco products,
cigarette papers, or cigarette tubes are duty- and tax-paid to CBP will
be treated as a return for purposes of this part.
(c) Required information. In the case of tobacco products and
cigarette papers and tubes imported into the United States for
consumption, the importer, if filing electronically, must file with
U.S. Customs and Border Protection (CBP) the information specified in
paragraphs (c)(1) through (7) of this section at the time of filing the
entry or entry summary, as appropriate, along with any other
information that is required by CBP to be filed with the entry or entry
summary for purposes of determining and collecting the Federal excise
tax and administering the provisions of the Internal Revenue Code. Any
information required under paragraphs (c)(1) through (7) of this
section that is required by, and filed with, CBP as part of the entry
or entry summary for purposes of meeting CBP requirements will also
satisfy the requirements of this section. Regardless of the method of
filing, the importer must retain as a record the information required
by this section, any information provided to CBP to meet CBP
requirements, and any supporting documentation and make such records
available upon request by the appropriate TTB officer or a customs
officer.
(1) All tobacco products. For all tobacco products, the following
information is required:
(i) The number of the tobacco product importer permit that is
issued under subpart K of this part;
(ii) The employer identification number (EIN) assigned to the
importer by the Internal Revenue Service and provided by the importer
on its permit application to TTB made on TTB Form 5230.4;
(iii) The name and address of the ultimate consignee;
(iv) The information specific to each tobacco product set forth in
paragraphs (c)(2) through (6) of this section.
(2) Cigarettes. For cigarettes, in addition to the information
required in paragraph (c)(1) of this section, the importer must provide
a description of the product for Internal Revenue Code purposes,
including ``cigarettes'' and either ``small'' (or ``class A'') or
``large'' (or ``class B'') and must also provide the number of
cigarettes.
(3) Cigars. For cigars, in addition to the information required in
paragraph (c)(1) of this section, the importer must provide:
(i) The number of cigars imported under each Harmonized Tariff
Schedule of the United States (HTSUS) code number;
(ii) The description of the cigars for Internal Revenue Code
purposes, including ``cigars'' and either ``large'' or ``small'';
(iii) For large cigars with a sale price of $763.222 or less per
1,000, the number and sale price (the price for which sold by the
importer) per 1,000 of such cigars; and
(iv) For large cigars with a sale price of more than $763.222 per
1,000, the number of such cigars.
(4) Smokeless tobacco. For smokeless tobacco, in addition to the
information required in paragraph (c)(1) of this section, the importer
must provide a description of the product for Internal Revenue Code
purposes, as either ``chewing tobacco'' or ``snuff'' and will state the
number of pounds and ounces or kilograms and grams of the product.
(5) Pipe tobacco. For pipe tobacco, in addition to the information
required in paragraph (c)(1) of this section, the importer must provide
a description of the product under the Internal Revenue Code, as ``pipe
tobacco,'' and will also state the number of pounds and ounces or
kilograms and grams of the product.
(6) Roll-your-own tobacco. For roll-your-own tobacco, in addition
to the information required in paragraph (c)(1) of this section, the
importer must provide a description of the product for Internal Revenue
Code purposes, as ``roll-your-own tobacco,'' ``cigarette tobacco,''
``cigarette wrapper,'' ``cigar tobacco,'' or ``cigar wrapper.'' The
importer must also state the number of pounds and ounces or kilograms
and grams of the product.
(7) Cigarette papers and cigarette tubes. For cigarette papers and
cigarette tubes, the importer must provide:
(i) The classification of the product for Internal Revenue Code
purposes, including either ``cigarette papers'' or ``cigarette tubes''
and an indication of whether the length of the papers or tubes is over
6\1/2\ inches;
(ii) The employer identification number (EIN) assigned to the
importer by the Internal Revenue Service;
(iii) The name and address of the ultimate consignee; and
(iv) The total taxable quantity of each.
* * * * *
(Approved by the Office of Management and Budget under control
number 1513-0064)
* * * * *
0
77. Section 41.84 is added to read as follows:
Sec. 41.84 Entry for warehousing.
(a) General. Except as provided in paragraph (b) of this section,
in the case of an entry for warehousing (that is, tobacco products,
cigarette papers, or cigarette tubes transferred directly to a customs
bonded warehouse or foreign trade zone), the last day for payment of
the tax shall not be later than the 14th day after the last day of the
semimonthly period during which the products are removed from the first
such warehouse, even if the tobacco products, cigarette papers, or
cigarette tubes are removed from that customs bonded warehouse or
foreign trade zone for transfer to another customs bonded warehouse or
foreign trade zone.
(b) Entry for warehousing of products destined for export.
Paragraph (a) of this section does not apply to tobacco products,
cigarette papers, or cigarette tubes entered for warehousing and then
removed for transfer to another custom bonded warehouse or foreign
trade zone that are shown to the satisfaction of the Secretary to be
destined for export.
(26 U.S.C. 5703(b)(2)(B)(ii), (iii), and (iv))
0
78. Section 41.86 is revised to read as follows:
[[Page 40435]]
Sec. 41.86 Entry process for releases without payment of tax.
(a)(1) General. Except as provided in paragraph (c) of this
section, in order for tobacco products or cigarette papers or tubes to
be released from customs custody without payment of tax under internal
revenue bond, as provided in 26 U.S.C. 5704(c) or (d), the information
required by this paragraph must be filed electronically with U.S.
Customs and Border Protection (CBP). The information must be filed with
CBP at the time of filing the entry or entry summary, as appropriate,
and it must be filed along with any other information that is required
by CBP for purposes of determining and collecting the Federal excise
tax and administering the provisions of the Internal Revenue Code. Any
information required under paragraph (a)(2) of this section that is
submitted to CBP as part of the entry or entry summary for purposes of
meeting CBP requirements will also satisfy the requirements of this
section. Regardless of the method of filing, the importer must retain
as a record the information required by this section, any information
provided to CBP for CBP purposes, and any supporting documentation and
such records must be available for inspection upon request by the
appropriate TTB officer or a customs officer.
(2) Information required. The manufacturer of tobacco products or
cigarette papers or tubes or export warehouse proprietor who wishes to
obtain the release of tobacco products or cigarette papers or tubes as
described in paragraph (a)(1) of this section must provide the
following information, as applicable:
(i) The number of the permit issued under 27 CFR part 40 to the
manufacturer of tobacco products or export warehouse proprietor, or the
TTB-assigned number of the manufacturer of cigarette papers or tubes,
to whom the products are shipped or consigned;
(ii) The employer identification number (EIN), assigned by the
Internal Revenue Service, of the manufacturer of tobacco products, the
manufacturer of cigarette papers or tubes, or the export warehouse
proprietor to whom the products are shipped or consigned;
(iii) The name and address of the ultimate consignee, consistent
with the name and address on the permit issued under part 40 of this
chapter;
(iv) For tobacco products, the number of the permit, issued under
subpart K of this part, of the importer;
(v) For tobacco products, the employer identification number (EIN)
assigned to the importer by the Internal Revenue Service and provided
to TTB by the importer on its permit application to TTB on TTB Form
5230.4;
(vi) A description of the product consistent with the tax
classification of the product under the Internal Revenue Code as
described in Sec. 41.81 (for example, ``large cigars''); and
(vii) The quantity of the product for Federal excise tax purposes,
by sticks or by pounds and ounces (or kilograms and grams), as
applicable.
(b) Releases without payment of tax--(1) Tobacco products or
cigarette papers or tubes put up in packages. Tobacco products or
cigarette papers or tubes put up in packages, as defined at Sec.
41.11, may be released without payment of tax only for delivery to the
proprietor of an export warehouse (as provided in 26 U.S.C. 5704(c))
or, if classified under chapter 98, subchapter I of the Harmonized
Tariff Schedule of the United States (relating to duty on certain
articles exported and returned), for delivery to the original
manufacturer of such tobacco products or cigarette papers or tubes or
to the proprietor of an export warehouse authorized by such
manufacturer to receive them (as provided in 26 U.S.C. 5704(d)). If the
information required in paragraph (a)(2)(i) through (iii) of this
section is not filed with the entry or entry summary, as appropriate,
or, if the information required in paragraph (c) of this section is not
made available to CBP upon request, the tobacco products, cigarette
papers, or cigarette tubes are not eligible for release from customs
custody for consumption, and no person may remove such products from
customs custody without payment of tax and without meeting requirements
related to the release of tobacco products, cigarette papers, or
cigarette tubes from customs custody subject to tax.
(2) Tobacco products or cigarette papers or tubes not put up in
packages. Tobacco products or cigarette papers or tubes not put up in
packages, as defined at Sec. 41.11, may not be released from customs
custody subject to tax, and no person may obtain release of such
products from customs custody. Tobacco products or cigarette papers or
tubes not put up on packages may be released from customs custody
without payment of tax for delivery to the proprietor of an export
warehouse, or to a manufacturer of tobacco products or cigarette papers
or tubes, as provided in 26 U.S.C. 5704(c). As a result, if the
information required in paragraphs (a)(2)(i) through (iii) of this
section is not filed with the entry or entry summary, as appropriate,
or, if the information required in paragraph (c) of this section is not
made available to CBP upon request, tobacco products or cigarette
papers or tubes not put up in packages are not eligible for release
from customs custody for consumption, and no person may remove such
product from customs custody.
(c) Filing on paper. A manufacturer or export warehouse proprietor
who wants to obtain the release of tobacco products or cigarette papers
and tubes from customs custody without payment of tax under its
internal revenue bond, and who does not file electronically, must
prepare a notice of release on TTB F 5200.11 and submit the form to the
appropriate TTB officer in accordance with the instructions on the
form. The appropriate TTB officer will certify on the TTB F 5200.11
that the manufacturer or export warehouse proprietor has TTB
authorization to receive the products. No one filing on paper may
obtain release of the products under this section until they have
received the TTB F 5200.11 certified by the appropriate TTB officer.
The manufacturer or export warehouse must have possession of the TTB F
5200.11, bearing TTB certification, at the time the products are
released from customs custody and must make the form available to a
customs officer upon request at such time. After release of the
products, the TTB F 5200.11 must be retained by the manufacturer or
export warehouse proprietor and made available to the appropriate TTB
officer or a customs officer upon request.
(Approved by the Office of Management and Budget under control
numbers 1513-0025 and 1513-0064)
0
79. Section 41.204 is revised to read as follows:
Sec. 41.204 Records and reports in general.
Every importer of tobacco products or cigarette papers or tubes
must keep records and, when required by this part, submit reports of
all tobacco products released from customs custody under the importer's
TTB permit, including information on the release from customs custody,
the receipt, and the disposition.
(Approved by the Office of Management and Budget under control
numbers 1513-0064 and 1513-0106)
0
80. Section 41.265 is added under the undesignated center heading
Operations of Importers of Processed Tobacco to read as follows:
Sec. 41.265 Processed tobacco importation process.
(a) General. In the case of processed tobacco imported into the
United States,
[[Page 40436]]
the importer, if filing electronically, must file with U.S. Customs and
Border Protection (CBP) the information specified in paragraph (b) of
this section at the time of filing the entry or entry summary, as
appropriate, along with any other information that is required by CBP
to be filed as part of the entry or entry summary for CBP purposes. If
the information required by this section is required by, and filed
with, CBP for purposes of meeting CBP requirements, such filing will
also satisfy the requirements of this section. Regardless of the method
of filing, the importer must retain as a record the information
required by this section, any information required as part of the entry
or entry summary by CBP for CBP purposes, and any supporting
documentation, and must make such records available upon request by the
appropriate TTB officer or a customs officer.
(b) Information required. The following information is required, as
described in paragraph (a) of this section:
(1) The number of the importer's permit issued under subpart K or M
of this part;
(2) The employer identification number (EIN) assigned to the
importer by the Internal Revenue Service and provided to TTB by the
importer on its permit application to TTB on TTB Form 5230.4;
(3) The name and address of the ultimate consignee;
(4) A description of the product as ``processed tobacco'' for
Internal Revenue Code purposes; and
(5) The quantity of processed tobacco.
(Approved by the Office of Management and Budget under control
number 1513-0064)
Signed: January 12, 2016.
John J. Manfreda,
Administrator.
Approved: March 30, 2016.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade and Tariff Policy).
[FR Doc. 2016-14359 Filed 6-20-16; 8:45 am]
BILLING CODE 4810-31-U