[Federal Register Volume 81, Number 246 (Thursday, December 22, 2016)]
[Rules and Regulations]
[Pages 94186-94210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-29201]



[[Page 94185]]

Vol. 81

Thursday,

No. 246

December 22, 2016

Part IV





 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, 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; Final Rule

  Federal Register / Vol. 81 , No. 246 / Thursday, December 22, 2016 / 
Rules and Regulations  

[[Page 94186]]


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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; T.D. TTB-145; Ref: 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: Final rule; Treasury decision.

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SUMMARY: In this document, the Alcohol and Tobacco Tax and Trade Bureau 
is amending its regulations governing the importation of distilled 
spirits, wine, beer and malt beverages, tobacco products, processed 
tobacco, and cigarette papers and tubes. The amendments in this 
document clarify and streamline import procedures, and support the 
implementation of the International Trade Data System and the filing of 
import information electronically. The amendments include providing the 
option for importers to file import-related data electronically when 
filing entry or entry summary data electronically with U.S. Customs and 
Border Protection (CBP), as an alternative to current TTB requirements 
that importers submit paper documents to CBP upon importation.

DATES: This final rule is effective December 31, 2016.

FOR FURTHER INFORMATION CONTACT: Jesse Longbrake, 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 066.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
    A. TTB Authority
    B. The International Trade Data System
    C. Executive Order 13659--Streamlining the Export/Import Process 
for America's Businesses
    D. Electronic Submission of TTB-Required Information to CBP
II. Publication of Proposed Rulemaking
III. Discussion of Comments
IV. Other Clarifying Changes
V. Regulatory Analyses and Notices
    A. Executive Order 12866
    B. Regulatory Flexibility Act
    C. Paperwork Reduction Act
    D. Administrative Procedures Act

List of Subjects

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 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 U.S. Customs and Border 
Protection (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 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

[[Page 94187]]

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 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 CBP in accordance with CBP 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, Public Law 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,

[[Page 94188]]

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.
    Currently, importers and exporters that are regulated by multiple 
agencies or that import or export commodities regulated by multiple 
agencies submit data to those agencies through various channels, often 
in paper form. Through the implementation of ITDS, data is submitted 
through CBP's Automated Broker Interface (ABI) to the Automated 
Commercial Environment (ACE), a CBP system, and then made available 
through ACE to each government agency. Accordingly, TTB is providing 
electronic filing options for information related to the importation of 
commodities regulated by TTB.

C. Executive Order 13659--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 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 current 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.
    On August 7, 2015, TTB published in the Federal Register (80 FR 
47558) a 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.'' In the notice, TTB announced a pilot program in which 
importers, CBP, and TTB would test, as part of the ITDS project, the 
electronic collection of TTB import data and the transfer of that data 
through ACE to TTB. Technical instructions on the submission of data 
using the TTB Partner Government Agency (PGA) Message Set provided in 
ACE were made available in ``ACE Filing Instructions for TTB-Regulated 
Commodities'' at Docket No. TTB-2016-0004 on Regulations.gov 
(www.regulations.gov). That document also appears on the CBP Web site 
at www.cbp.gov. On October 21, 2015, TTB also published on its Web 
site, www.ttb.gov, Industry Circular 2015-1, ``Automated Commercial 
Environment Pilot Program; Alternate Method for Participants to Fulfill 
TTB Requirements for Importation,'' to allow importers to test the 
usability and functionality of the TTB PGA Message Set, while still 
complying with regulatory requirements.
    TTB notes that under these amended regulations, importers may elect 
not to file TTB data electronically, but may instead continue to submit 
paper documentation consistent with existing requirements.

II. Publication of Notice of Proposed Rulemaking

    On June 21, 2016, TTB published in the Federal Register (81 FR 
40404) a notice of proposed rulemaking, Notice No. 159, setting forth 
the proposed amendments to parts 1, 4, 5, 7, 26, 27, and 41 of the TTB 
regulations concerning the implementation of ITDS. Notice No. 159 and 
the comments received in response to that document may be viewed in 
their entirety within Docket No. TTB-2016-0004 at the Regulations.gov 
Web site (www.regulations.gov).
    As described in Notice No. 159, TTB's general approach in the 
proposed regulations was to 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 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.
    There are generally two methods of electronic submission of 
information: Electronic submission of data directly and electronic 
submission of documents as electronic images. In many instances, TTB 
has chosen the former, that is, to provide importers with the option to 
directly submit required data electronically. The regulations, however, 
also allow for the submission of certain paper documents as electronic 
images in some circumstances. In circumstances in which the amended 
regulations require that the importer make a document available to TTB 
or CBP upon request, the document may be submitted through ACE as an 
electronic image. Specifically, electronic images may be uploaded into 
ACE through the Document Imaging System (DIS) module. More information 
regarding the submission of data using the DIS module is available in 
the ``ACE Filing Instructions for TTB-Regulated Commodities'' at Docket 
No. TTB-2016-0004 on Regulations.gov (www.regulations.gov).
    Notice No. 159 describes in detail the rationale for each proposed 
regulatory amendment. The principal regulatory amendments proposed in 
Notice No. 159 can be summarized as follows:
     Filing of the FAA Act Basic Permit Number: TTB proposed 
amendments to 27 CFR 1.58 to require that importers of alcohol 
beverages file their FAA Act basic permit number with CBP when filing 
TTB data electronically, and, regardless of the method of filing, to 
require that such importers make their basic permit available to TTB or 
CBP upon request. TTB also proposed

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amendments to 27 CFR 26.202 removing the requirement that importers of 
alcohol beverages file a copy of their FAA Act basic permit with CBP at 
the port of entry when bringing such products into the United States 
from the U.S. Virgin Islands, and instead requiring that such importers 
file their basic permit number with the customs entry when filing TTB 
data electronically, and, regardless of the method of filing, make 
their basic permit available to TTB or CBP upon request.
     Filing of a COLA Identification Number or COLA Documents: 
TTB proposed amendments to 27 CFR 4.40, 5.51, and 7.31 allowing 
importers of alcohol beverages, when filing TTB data electronically, to 
file with the customs entry the TTB-assigned identification number of 
the COLA associated with bottled wine, distilled spirits, or malt 
beverages. TTB also proposed amendments to 27 CFR 26.314 and 27.204 to 
remove requirements, applicable to distinctive liquor bottles, for 
importers to provide a photograph of the bottle to CBP upon entry. The 
proposed regulations retained the current requirement that, if the 
importer is not filing electronically, the importer must provide a copy 
of the COLA to CBP at time of entry.
     Removal of Requirement for Certain Gin Statements of 
Process: TTB proposed removing the regulatory requirement in 27 CFR 
5.51(d) that a COLA covering labels for imported gin bearing the word 
``distilled'' be accompanied by a statement of process. TTB notes that 
a requirement remains, pursuant to 27 CFR 5.33(g) and TTB guidance, 
that a statement of process be submitted to TTB as part of the 
application for a COLA covering labels on distilled gin products.\6\ 
The amendment to the regulation clarifies that the statement of process 
is not submitted at importation along with the approved COLA.
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    \6\ At the time of publication of Notice No. 159, Industry 
Circular 2007-4, which addresses pre-COLA evaluation requirements, 
identified imported distilled gin as requiring the submission of a 
``pre-import letter'' with the application for a COLA. Following 
publication of Notice No. 159, TTB issued updated pre-COLA 
evaluation requirements addressing distilled spirits products in 
guidance document TTB G 2016-3. Under both Industry Circular 2007-4 
and TTB G 2016-3, as part of the application for a COLA, an importer 
of distilled gin must submit a pre-import letter detailing, among 
other things, the manufacturing process of distilled gin.
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     Possession and Retention of Certificates of Age, Origin, 
or Identity Issued by Foreign Governments for Importations of Certain 
Wine and Distilled Spirits Products: TTB proposed amendments to 27 CFR 
4.45, 5.52, and 5.56 to clearly state that certain wine and distilled 
spirits are not eligible for release from customs custody, and no 
person may remove those products from customs custody, unless that 
person has obtained and is in possession of a certificate of age, 
origin, or identity, as applicable, from an official duly authorized by 
the appropriate foreign government. The certificate must be made 
available to TTB or CBP upon request. TTB proposed amending those 
regulatory sections and adding a new section, 27 CFR 4.53, to specify 
that the certificates must be retained and made available upon request 
for five years following importation.
     Certification of Imported Vintage Wine: TTB proposed 
amendments to 27 CFR 4.27 removing the requirement that the importer or 
bottler of imported vintage wine possess a specific certificate issued 
by a duly authorized official of the country of origin certifying that 
the wine meets various criteria related to the vintage wine and, 
instead, requiring that the importer or domestic bottler of wine be 
able to demonstrate upon request that the wine is entitled to be 
labeled with the vintage date. Other rules set forth in Sec.  4.27 
relating to the use of a vintage date on labels of imported wine remain 
unchanged.
     Imported Natural Wine and Possession of Certificates: TTB 
proposed amendments to 27 CFR 26.11 and 27.11 adding a definition of 
natural wine applicable to all of parts 26 and 27. TTB also proposed 
amendments to 27 CFR 4.43, 4.45, and 27.140 allowing importers and 
domestic bottlers to meet requirements related to natural wine 
certificates by having the applicable certificates in their possession, 
to be made available to TTB or CBP upon request. The proposed amendment 
to part 27 requires the certificates to be retained for three years, 
and the proposed amendment to part 4 requires the certificates to be 
retained for five years.
     Removal of Requirement To Present CBP with Certificates of 
Nonstandard Fill for Wine and Distilled Spirits: TTB proposed removing 
requirements at 27 CFR 4.46 and 5.53 that an importer present to CBP 
certification that wine or distilled spirits imported in containers not 
conforming to authorized standards of fill meet certain criteria 
showing that it is eligible for release. Review of such certification 
is performed by TTB when the importer submits to TTB the COLA 
application covering the products, and the proposal reflects TTB's view 
that the showing of certification to CBP is no longer necessary.
     Removal of Requirements Concerning Liquor Bottles and 
Filing Certain Applications in Triplicate: TTB proposed amendments to 
27 CFR 26.316 and 27.206 clarifying that liquor bottles found to be 
deceptive by the appropriate TTB officer may not be brought into the 
United States. TTB proposed removing provisions in 27 CFR 26.318 and 
26.208 requiring that applications for authorization to receive such 
bottles be filed in triplicate. TTB also proposed removing provisions 
in Sec. Sec.  26.319, 26.331, 27.209, and 27.221 requiring that 
applications related to receipt of used liquor bottles and applications 
for alternate methods or procedures be filed in triplicate.
     Filing of Data on Distilled Spirits, Wine, and Beer 
Imported or Brought into the United States From the U.S. Virgin Islands 
Subject to Tax: TTB proposed amendments to 27 CFR 27.48 and 26.200 
requiring that importers file with CBP and/or retain certain 
information identifying distilled spirits, wine, and beer imported or 
brought into the United States from the U.S. Virgin Islands subject to 
tax, as well as information identifying the importer and ultimate 
consignee of such products. Information retained would be required to 
be made available upon request to TTB or CBP. The proposed amendments 
also provide that any information provided to CBP to meet CBP 
requirements, and any supporting documentation must also be made 
available upon request to TTB or CBP.
     Distilled Spirits to Which an Effective Tax Rate or 
Standard Effective Tax Rate Applies: TTB proposed amendments to 27 CFR 
27.76 and 27.77 removing the requirement that the importer submit the 
certificate of effective tax rate or the standard effective tax rate 
approval applicable to distilled spirits at entry or entry summary, and 
instead requiring that the importer have the certificate in its 
possession at the time of filing the entry summary and make it 
available upon request to TTB or CBP. In the case of distilled spirits 
withdrawn from customs custody without payment of tax for transfer to 
the bonded premises of a distilled spirits plant, the current 
requirement remains unchanged, which is that the importer must provide 
a copy of the certificate of effective tax rate or the standard 
effective tax rate approval to the proprietor of the distilled spirits 
plant.
     Alcohol Beverages Imported or Brought into the United 
States From the U.S. Virgin Islands in Bulk: TTB proposed amendments to 
27 CFR 27.171 and 26.300 to set forth the general provisions related to 
bulk beer and

[[Page 94190]]

natural wine imported or brought into the United States from the Virgin 
Islands without payment of tax. The proposed amendments generally 
provide for the transfer of tax liability to the proprietor of the 
bonded wine cellar or bonded brewery receiving such bulk wine or beer, 
respectively. TTB also proposed amendments to 27 CFR 27.138, 27.172, 
26.273a, and 26.301 to include transfer record requirements for bulk 
wine and beer released from customs custody without payment of tax, and 
to add specific information that is required to be captured in such 
records. Finally, TTB proposed various clarifying amendments in 27 CFR 
parts 26 and 27 relating to imports in bulk, including amendments to 
the definition of ``bulk container'' in 27 CFR 27.11 and 27 CFR 26.11.
     Filing of Permit Number and Other Information for 
Industrial Alcohol Shipments to the United States From the U.S. Virgin 
Islands: TTB proposed amendments to 27 CFR 26.292, 26.294, and 26.296 
to provide for electronic filing of the consignee permit number and 
other information for tax-free industrial alcohol shipments to the 
United States from the U.S. Virgin Islands.
     Filing of Permit Number and Data by Government Agencies 
Importing Distilled Spirits Free of Tax: TTB proposed amendments to 27 
CFR 27.183 and 27.284 to provide for electronic filing of the permit 
number of government agencies importing distilled spirits for 
nonbeverage purposes free of tax, and for electronic filing of other 
information associated with such imports. TTB also proposed to remove 
27 CFR 27.185, as it describes customs processes and inspection related 
to the release of distilled spirits free of tax to government agencies. 
(As noted in Notice No. 159, TTB generally proposed 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.)
     Certificate Covering Distilled Spirits, Wine, or Beer 
Brought into the United States From the U.S. Virgin Islands: TTB 
proposed amendments to 27 CFR 26.205 and 26.260. Section 26.205 
requires that every person bringing distilled spirits, wine, or beer 
into the United States from the U.S. Virgin Islands, except tourists, 
obtain a certificate in the English language from the manufacturer 
detailing certain information, such as the name and address of the 
consignee, the kind and brand name of the products, the quantity, and 
information upon which an effective tax rate is based. The proposed 
amendments no longer require this certificate to be filed with CBP at 
the time of entry summary, and instead provide that the information 
associated with the certificate must be maintained as a record by the 
importer and must be made available upon request to TTB or CBP. The 
proposed amendments also provide 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 distilled spirits plant, bonded wine 
cellar, or brewery receiving the products.
     Clarification of Record Retention Requirements: TTB 
proposed amendments to 27 CFR 26.276 and 27.137, which set forth 
recordkeeping requirements for all documents or copies of documents 
that support records required by parts 26 and 27. The proposed 
amendments clarify that the three-year record retention requirements in 
parts 26 and 27 are measured from the time of release from customs 
custody, and require that such records, which include information and 
supporting documentation filed with CBP pursuant to CBP requirements, 
be made available to TTB or CBP upon request.
     Removal of Requirements for CBP to Gauge or Inspect: TTB 
proposed removing various provisions in 27 CFR parts 26 and 27 that 
state that customs officers shall inspect or gauge shipments of alcohol 
before release.
     Filing of Data for Importation of Tobacco Products Subject 
to Tax and Processed Tobacco: TTB proposed amendments to 27 CFR 41.81 
providing for electronic filing of data required for imports of tobacco 
products and cigarette papers and tubes subject to tax. The proposed 
amendments require that importers of tobacco products file information 
identifying the importer (including the TTB permit number for importers 
of tobacco products) and ultimate consignee, and further require that 
the importer retain the required information and supporting 
documentation, to be made available to TTB or CBP upon request. Similar 
provisions applicable to imports of processed tobacco were proposed at 
a new section 27 CFR 41.265. In both cases, the proposed regulations 
additionally provide that any information and supporting documentation 
required as part of the entry or entry summary by CBP for CBP purposes 
must be made available upon request to TTB. TTB also proposed 
amendments to 27 CFR 41.204, which concerns records and reports, to 
remove references to ``physical'' receipt and disposition of tobacco 
products. The proposed amendments require importers of tobacco products 
to account 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.
     Filing of Data for Importation of Tobacco Products Without 
Payment of Tax: TTB proposed amendments to 27 CFR 41.86, which 
addresses the release of tobacco products and cigarette papers and 
tubes from customs custody without payment of tax under internal 
revenue bond, to provide for electronic filing of data required for 
imports of such articles without payment of tax. While the current 
regulations require the filing of a paper form, TTB F 5200.11, the 
proposed amendments allow the data required on TTB F 5200.11 to be 
input directly into ACE. The proposed amendments additionally require 
the filing of the importer's TTB permit number (for tobacco products 
only) and the employer identification number (EIN) of the recipient of 
the tobacco products or cigarette papers and tubes, and require that 
the importer retain the required information and supporting 
documentation, to be made available to TTB or CBP upon request.
     Entries for Warehousing: TTB proposed amendments to 27 CFR 
26.200, 27.45, and 27.48, and proposed a new section at 27 CFR 41.84, 
to incorporate statutory provisions, codified in the IRC at 26 U.S.C. 
5061(a)(2) for distilled spirits, wine, and beer and at 26 U.S.C. 
5703(b)(2) for tobacco products and cigarette papers and tubes, 
providing generally that tax is due on products entered for warehousing 
not later than the 14th day after the last day of the semimonthly 
period during which the products are removed from the first such 
warehouse.
    Subject to certain clarifying changes described in the Discussion 
of Comments and Other Clarifying Changes sections below, TTB is 
finalizing the proposed amendments in this rulemaking.

III. Discussion of Comments

Comment Overview
    TTB received seven comments in response to Notice No. 159, which 
included comments submitted by or on behalf of one customs brokers and 
several trade organizations: Portside Customs Service, Inc. (Portside 
Customs Service); the Comit[eacute] lnterprofessionnel du Vin de 
Champagne (Comit[eacute] Champagne); the Bureau National

[[Page 94191]]

Interprofessionnel du Cognac; the French Federation of Wine and Spirits 
Exporters (or ``F[eacute]d[eacute]ration des Exportateurs de Vins et 
Spiritueux de France''); the Distilled Spirits Council of the United 
States, Inc. (DISCUS); the National Association of Beverage Importers 
(NABI); and the National Association of Foreign-Trade Zones (NAFTZ).
    Comments from the Comit[eacute] Champagne, the French Federation of 
Wine and Spirits Exporters, DISCUS, and NABI expressed general support 
for the implementation of the electronic ``single window'' through 
which importers may submit electronically the data required by Federal 
government agencies for clearing imports. Each of these entities, along 
with the remaining commenters, also submitted requests for 
clarifications and/or changes to the regulatory amendments proposed in 
Notice No. 159.
    Descriptions of the comments, along with TTB's responses, are 
organized by topic and set forth below.

Possession and Retention of Certificates of Age, Origin, or Identity 
Issued by Foreign Governments for Importations of Certain Wine and 
Distilled Spirits

Comment
    Three commenters expressed concern over amendments to 27 CFR 4.45 
and 27 CFR 5.52. The commenters generally express concern with any 
shift from a requirement that certificates of age, origin, and identity 
be submitted to CBP in order to obtain release from customs custody to 
a solely post-release review, viewing such a shift as weakening the 
implementation of the certificate requirements and encouraging non-
compliance.
    The current regulations at 27 CFR 4.45 and 27 CFR 5.52 contain 
requirements under which importers must possess certain certifications 
from duly authorized foreign officials in order for the labels of those 
beverages to bear certain designations. In general, paragraph (a) of 
Sec.  4.45 addresses certificates of origin and identity for wine, 
which certify 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. 
Paragraphs (a) though (e) of Sec.  5.52 set forth similar certificate 
of origin requirements for Scotch, Irish, and Canadian whiskies; 
brandy, Cognac, and rum; Tequila; other whiskies; and other distilled 
spirits, respectively. In some cases, the certificates must also 
address production practices or age statements.
    Under current TTB regulations, the above certificates must 
generally accompany the wines or distilled spirits (or accompany the 
invoice applicable to such wines or distilled spirits). The amended 
regulations at 27 CFR 4.45(a) and 27 CFR 5.52(a) through (e) instead 
require the importer to have the certificate in its possession, to be 
made available to TTB or CBP upon request.
    The Comit[eacute] Champagne, which is the body authorized by the 
government of France to issue documents that certify that wines are 
produced according to Champagne appellation requirements, notes in its 
comment its belief that systematic controls of certificates of origin 
remain the most effective anti-counterfeit methods. Its comment further 
states that since Champagne certificates of origin are secured 
electronic documents, systematic controls would not create unnecessary 
burdens for importers or U.S. controllers.
    With respect to the amendments to 27 CFR 5.52(b), the Bureau 
National Interprofessionnel du Cognac, which describes itself as the 
governing body entitled by French and EU Law to protect the 
geographical indication Cognac and represent and defend the interest of 
all the Cognac producers and trade houses, expresses concern that a 
shift from a systematic pre-release monitoring of certificates of age 
and origin to a potential post-release review may encourage 
noncompliance and eventually erode Cognac's status as a distinctive 
product of France under TTB's regulations. The Bureau National 
Interprofessionnel du Cognac requests retention of the requirement that 
the certificates required under Sec.  5.52(b) accompany the shipment.
    The French Federation of Wine and Spirits Exporters, which is a 
trade association representing the wine and spirit exporting companies 
of France, commented supporting the proposed requirement that the 
importer must possess the certificates required under 27 CFR 4.45 and 
27 CFR 5.52, as opposed to the existing requirements that the 
certificate accompany the wines or distilled spirits when clearing CBP. 
However, the French Federation of Wine and Spirits Exporters notes its 
concern that a shift to a ``post release review on a random basis'' 
from a systematic control upon importation might weaken the 
implementation of these provisions, encourage non-compliance, and 
eventually result in weakening the level of protection afforded to the 
consumer under the present regulations. The French Federation of Wine 
and Spirits Exporters expresses its view that certificates required 
under Sec. Sec.  4.45 and 5.52 must be issued with each single 
shipment, and properly reference the shipment information, so that a 
given certificate can be traced back to a single shipment. The French 
Federation of Wine and Spirits Exporters also encourages TTB to enforce 
post-entry review in a manner and at a frequency that will encourage 
compliance, and to enforce tough penalties for noncompliance, 
especially when there is suspicion or proof of fraud.
    TTB response: As noted above, the current regulations at 27 CFR 
4.45 and 27 CFR 5.52 contain certain requirements under which importers 
must possess certifications from duly authorized foreign officials 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. Under current TTB regulations, such certificates must 
generally accompany the wines or distilled spirits (or accompany the 
invoice applicable to such wines or distilled spirits). The amended 
regulations at 27 CFR 4.45(a) and 27 CFR 5.52(a) through (e) instead 
require the importer to have the certificate in its possession, to be 
made available to TTB or CBP upon request. The amended regulations also 
require importers to retain these certificates for a period of five 
years.
    TTB notes that the amendments to 27 CFR 4.45 and 5.52 are not 
intended to change in any way the eligibility requirements for wines or 
distilled spirits to be released from customs custody. Under the 
amended regulations, as under the current regulations, products 
requiring a certificate of age, origin, or identity may not enter the 
United States for consumption unless covered by such a certificate. CBP 
has the authority to examine such certificates prior to release, and 
the amended regulations do not in any way diminish this authority. 
Additionally, for electronic filers, the TTB PGA Message Set allows the 
importer to attest to the possession of certificates of age, origin, or 
identity at importation, where such certificates are required by 
regulation.
    TTB exercises its authority to regulate beverage alcohol importers 
under the FAA Act in part through post-release review of compliance 
with requirements such as the certificate requirements of 27 CFR 4.45 
and 5.52. This includes the review of documents that an importer is 
required to have in its possession at the time of the filing of the 
entry. As noted in Notice No. 159, TTB now has timely

[[Page 94192]]

access to importation information through ACE and has the ability to 
determine whether a certificate of age, origin, or identity is required 
for a certain product and whether a certificate is valid, including by 
requesting that the importer upload an image of the certificate through 
the Document Imaging System (DIS) module in ACE. Under the amended 
regulations, TTB will be able, through post-release review of the 
importation information, to determine whether the appropriate 
certificate of age, origin, or identity is in the possession of the 
importer. TTB's post-release review capabilities include the ability to 
reconcile certificates of age, origin, or identity with the specific 
shipments covered by those certificates. 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 and preventing future noncompliance by taking enforcement 
action against noncompliant actors.
Comment
    Two commenters expressed concern over TTB's proposed amendments to 
27 CFR 5.56. Under current regulation, 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 the certificates of age and certificates of origin required 
under 27 CFR 5.52 for like spirits were they imported in bottles. The 
current Sec.  5.56 provides that bottler must possess certificates 
``which are similar to'' the certificates required under Sec.  5.52. 
The amendment to Sec.  5.56 proposed in Notice No. 159 would require 
that the bottler possess certificates which provide the ``same 
information'' as a certificate required under Sec.  5.52 would provide 
for like spirits imported in bottles.
    The French Federation of Wine and Spirits Exporters notes 
reservations about the proposed amendment to Sec.  5.56, particularly 
concerning the potential meaning of the amendment. It states that if 
the proposed change results in certificates of age and origin being 
issued by an entity different from the authorized issuer (e.g., the 
Bureau National Interprofessionnel du Cognac in the case of Cognac), 
the amendment would significantly weaken the trust and confidence that 
the U.S. consumer has in the integrity of the product. The Bureau 
National Interprofessionnel du Cognac notes similar concerns, and 
states that if the proposed change would allow entities other than the 
Bureau National Interprofessionnel du Cognac to issue certificates of 
age and certificates of origin for Cognac imported in bulk, it may 
affect the impact the authenticity, age, or quality of the Cognac sold 
in the United States and seriously damage the confidence of U.S. 
consumers in Cognac.
    TTB response: The proposed amendment to Sec.  5.56 was not intended 
to change the entities that may issue certificates of age, origin, or 
identity; rather, TTB intended to replace the reference to 
``certificates which are similar to the certificates required under 
Sec.  5.52'' with a more specific reference to the content of the 
certificates. TTB did not intend to imply that the certificates could 
be issued by an entity other than an official duly authorized by the 
appropriate foreign government. TTB understands the commenters' 
concerns regarding the potential ambiguity created by the proposed 
regulatory text. In the amended regulations finalized in this document, 
we have clarified that the certificates required under Sec.  5.56 are 
those issued by an official duly authorized by the foreign government 
as set forth in Sec.  5.52. TTB has further determined that the same 
ambiguity identified by the commenters may exist in the proposed new 27 
CFR 4.53, and so has also clarified this issue in the Sec.  4.53 
regulatory text finalized in this document.
Comment
    DISCUS requests that TTB adopt a single three-year recordkeeping 
retention requirement for all components of an entry filing, 
specifically noting that TTB has specified a record retention period of 
five years for certificates of age, origin, or identity, while other 
documents have a three-year record retention requirement.
    TTB response: TTB has set forth a five-year record retention period 
for certificates of age, origin, or identity because the requirement 
for such certificates is promulgated under the FAA Act, and there is a 
five-year statute of limitations for criminal violations of the FAA 
Act. Specifically, the TTB regulations at 27 CFR 4.45, 27 CFR 4.53, 27 
CFR 5.52, and 27 CFR 5.56 concerning certificates of age, origin, or 
identity implement labeling provisions of the FAA Act codified in the 
United States Code at 27 U.S.C. 205. Pursuant to the United States Code 
at 27 U.S.C. 207, violation of section 205 is a criminal offense.
    While the FAA Act does not contain any specific recordkeeping 
requirements applicable to certificates of age, origin, or identity, 
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. 
Additionally, as noted above, TTB has authority under section 2(d) of 
the FAA Act, Public Law 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 further notes that the amended regulations do not require 
industry members to retain paper copies of each certificate; they may 
retain electronic copies of certificates.

Filing of a COLA Identification Number or COLA Documents by Importers 
of Alcohol Beverages

Comment
    Portside Customs Service comments on the proposed amendments to 27 
CFR 4.40, 5.51, and 7.31 which require that importers of alcohol 
beverages enter the COLA identification number for the COLA applicable 
to each wine, distilled spirit, or malt beverage included in a 
shipment. Portside Customs Services comments that requiring importers 
of alcohol beverages to enter a COLA identification number for each 
line of an import entry will require too much time for customs brokers 
to clear shipments or, alternatively, will result in customs brokers 
charging more for their services. Portside Customs Service requests 
that TTB remove this requirement.
    TTB response: 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, TTB's regulations at 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

[[Page 94193]]

approved labels may be released from customs custody.
    As explained in Notice No. 159, TTB believes it is not necessary to 
require the importer to deposit a paper copy of the approved COLA upon 
importation when filing TTB data electronically. Each approved COLA has 
a number associated with it, and images of approved COLAs can be 
accessed by entering the COLA identification number into TTB's online 
database, the Public COLA Registry.\7\ TTB is therefore amending 
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. Accordingly, importers may satisfy 
the requirements of amended Sec. Sec.  4.40, 5.51, and 7.31 by entering 
the COLA identification numbers applicable to an entry in the TTB PGA 
Message Set in ACE, or may continue the current practice of providing a 
copy of the COLA to CBP.
---------------------------------------------------------------------------

    \7\ For the Public COLA Registry, see https://www.ttbonline.gov/colasonline/publicSearchColasBasic.do.
---------------------------------------------------------------------------

    TTB believes that the amendments to Sec. Sec.  4.40, 5.51, and 7.31 
ultimately streamline the implementation of the FAA Act's COLA 
provisions, and provide options that can ease compliance burdens on 
industry members.
Comments
    Two commenters suggest that TTB implement in ACE a method for 
importers to identify whether they are the holder of the COLA(s) 
applicable to an entry, or instead are authorized to import products 
covered by that COLA(s) by the entity to which the COLA is issued. In 
the case of an importer that is using another entity's COLA with 
authorization, the commenters request that TTB implement in ACE a 
method for importers to submit proof of that authorization to ensure 
that COLAs are used only by authorized entities. Both commenters frame 
their request in the specific context of ``direct import'' 
transactions.
    DISCUS notes that the proposed amendments to 27 CFR 5.51 would 
provide that no person may remove bottled distilled spirits from 
customs custody unless the person ``has obtained and is in possession 
of a certificate of label approval (COLA).'' DISCUS explains that 
importers that are the holders of the COLA for a brand often will have 
imported product delivered directly to a domestic wholesaler; i.e., a 
``direct import.'' DISCUS notes that in direct import transactions, the 
domestic wholesaler often does not have in its possession the COLA 
applicable to the imported products. DISCUS requests that TTB implement 
in ACE a ``drop-down'' box where the wholesaler could indicate that it 
is in the possession of a letter from the importer authorizing the 
wholesaler's use of the importer's COLA, or submit such a letter. 
DISCUS states that this feature would provide all interested 
stakeholders with the confidence that only appropriate parties are 
clearing customs for the appropriate brands. DISCUS also states that 
requiring the person removing the product from customs custody to be in 
possession of the COLA could disrupt current supply chain dynamics and 
efficiencies, without any commensurate benefit.
    NABI states that direct imports are a component of a secure supply 
chain, and encourages TTB to work with the importer and brokerage 
communities to assure that COLAs are only used by authorized partners 
in the international supply chain. NABI explains that direct import 
transactions involve beverage wholesalers acting as agents of 
authorized importers. NABI states that the authorized importer is the 
holder of the COLA and, in the case of a direct import by the 
importer's business partner, a letter of authorization is issued to 
facilitate the release of cargo from CBP. NABI concludes that these 
letters of authorization must be incorporated into ACE to assure that 
there is no interruption in CBP release of products.
    TTB response: As noted above, the TTB regulations at 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. Pursuant to ATF Ruling 84-3, TTB has allowed, under 
certain specified circumstances, the use of a COLA by an importer that 
is not the importer to which the COLA was issued if: (1) The importer 
to which the COLA was issued has authorized such use, (2) each bottle 
or individual container bears the name (or trade name) and address of 
the importer to which the COLA was issued and (3) the importer to which 
the COLA was issued maintains records of the companies it has 
authorized to use its certificate. TTB notes that, under current 
regulations, an importer importing products using a COLA issued to 
another entity must possess the COLA to meet the requirement of 
Sec. Sec.  4.40, 5.51, and 7.31 to deposit the COLA with the 
appropriate customs officer at the port of entry.
    The amendments proposed in Notice No. 159 to Sec. Sec.  4.40, 5.51, 
and 7.31 would provide, in pertinent part, that bottled wine, distilled 
spirits, or malt beverages, respectively, are not eligible for release 
from customs custody, and no person may remove such products from 
customs custody for consumption, unless ``the person removing the 
[products] has obtained and is in possession of a certificate of label 
approval (COLA)''. The proposed amendment would also require that any 
person removing such products from customs custody for consumption 
``must first apply for and obtain a COLA covering the [products] from 
the appropriate TTB officer.''
    TTB agrees that the proposed amendments to Sec. Sec.  4.40, 5.51, 
and 7.31 failed to capture this practice, which was not TTB's intent. 
Accordingly, in the regulatory text finalized in this document, we have 
changed the amendments to Sec. Sec.  4.40, 5.51, and 7.31 to clarify 
that bottled wine, distilled spirits, or malt beverages may be released 
to an importer who is authorized by a COLA holder to import products 
covered by the COLA. TTB notes that these amendments do not supersede 
ATF Ruling 84-3 or its holding that the COLA holder remains responsible 
for the imported product and its distribution in the United States.
    Both commenters requested that TTB implement a method in ACE for a 
domestic wholesaler to indicate that it is in the possession of a 
letter from the importer authorizing the wholesaler's use of the 
importer's COLA, or submit such a letter, in order to ensure that only 
authorized entities are entering products subject to the COLA 
requirements.
    TTB believes it is necessary to clarify certain facts related to 
this request. First, the provisions of Sec. Sec.  4.40, 5.51, and 7.31 
are applicable to the importer of the products, that is, the entity 
under whose FAA Act basic permit the products are released. Under the 
amended regulations, an importer filing electronically must file with 
CBP, at the time of filing the customs entry, the TTB-assigned 
identification number of the valid COLA covering the label on the 
alcohol 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 neither scenario is a wholesaler to whom the products 
may ultimately be shipped required by TTB regulations to provide 
information or documentation for the products to be released. In 
general, a

[[Page 94194]]

wholesaler is not required to submit information or documentation into 
ACE for the release of bottled wine, distilled spirits, or malt 
beverages unless that wholesaler is itself the importer.
    Second, in situations where an importer imports products covered by 
a COLA issued to another entity (with the authorization of the entity 
to which the COLA was issued), there is no requirement in the TTB 
regulations that a COLA authorization letter be submitted to CBP in 
order for such products to be released. However, the amended 
regulations clarify that proof of such authorization must be made 
available to TTB or CBP upon request. Where an importer is authorized 
to import products covered by another importer's COLA, the importer 
importing the products must have a copy of the COLA, and as a result 
will also have the COLA identification number, either of which may be 
used to satisfy the initial release eligibility requirements of 
Sec. Sec.  4.40, 5.51, and 7.31. If CBP or TTB requests that an 
importer submit proof of their authorization to use another person's 
COLA, any supporting documentation may be uploaded into ACE through the 
DIS module, or submitted in paper. More information regarding the 
submission of data using the DIS module is available in the ``ACE 
Filing Instructions for TTB-Regulated Commodities'' at Docket No. TTB-
2016-0004 on Regulations.gov (www.regulations.gov).
    TTB appreciates the commenters' input regarding the need to ensure 
that all alcohol beverages imported into the United States comply with 
the labeling provisions of the FAA Act. TTB is considering the 
enforcement efficacy of implementing an indicator in the TTB PGA 
Message Set through which importers would indicate that they are using 
a COLA held by another entity. If TTB determines that these steps would 
be valuable for purposes of enforcing Sec. Sec.  4.40, 5.51, and 7.31, 
they will be proposed in a separate action.
Comments
    Three commenters request that requests for waivers from the COLA 
requirement for imports for trade shows and/or sales samples be 
accepted electronically. DISCUS specifically requests that acceptance 
of such documents in ACE be allowed, as either an electronic document 
upload or as an electronic certification that the waiver is in the 
importer's possession. The French Federation of Wine and Spirits 
Exporters generally requests that electronic submission, or electronic 
certification of possession, be available for such documents. NABI 
suggests that TTB convert COLA waivers to electronic documents, or 
electronically stamp COLA waiver applications, so that COLA waivers may 
be submitted as digital documents along with documentation filed with 
CBP.
    TTB response: TTB first notes that there is an exemption code in 
the TTB PGA Message Set for importers to indicate that a product is 
exempt from the COLA requirement under a waiver. Further, COLA waiver 
documents may be uploaded electronically into ACE through the DIS 
module.
    With regard to the suggestions that TTB further streamline the way 
that it indicates authorization of a waiver, although that is outside 
the scope of the current rulemaking (as this rulemaking is directed at 
amending current regulations to provide for electronic submission of 
information to CBP or TTB upon import), TTB is considering further 
streamlining of the COLA waiver process, which may be addressed in a 
future rulemaking.

Reporting of Certain Required Information for Foreign-Trade Zone 
Related Entries

Comment
    NAFTZ requests that, for foreign-trade zone (FTZ) related entries, 
the ``importer of record'' continue to be considered the consignee for 
purposes of reporting CBP and TTB information in ACE ``at the time of a 
Type 06 FTZ entry.''
    TTB response: TTB first notes that a ``Type 06 FTZ entry'' refers 
to a withdrawal of products from an FTZ for consumption in the United 
States; this type of entry is an importation for purposes of TTB 
regulations. TTB also notes that ``importer of record'' is a term 
specific to CBP regulations and CBP forms; TTB regulations and 
requirements refer to the ``importer'' (which is specifically defined 
in parts 27 and 41), but not to the ``importer of record''. 
Accordingly, information submitted in ACE regarding the importer of 
record is required for purposes of fulfilling CBP requirements, and 
does not necessarily apply to TTB requirements.
    Under the amended regulations, TTB requires electronic filers to 
supply information via the TTB PGA Message Set regarding the importer 
of products which are subject to TTB regulation. For purposes of the 
TTB PGA Message Set, the ``importer'' refers to the individual or 
entity identified as the importer in the corresponding TTB regulations 
and possessing the applicable TTB permit (which TTB will refer to here 
as the ``TTB importer''). Generally, the amended regulations require 
that electronic filers supply information such as the TTB importer's 
TTB permit number, address, and employer identification number. The 
amended regulations also require that electronic filers identify the 
name and address of the ultimate consignee of the imported products in 
the TTB PGA Message Set. The ultimate consignee is the person to whom 
the products being imported are shipped. Depending on the individual 
circumstances of a transaction, the TTB importer may be the same entity 
as the importer of record reported to CBP.

IV. Other Clarifying Changes

    In addition to the clarifying changes described in the Discussion 
of Comments section above, the regulatory amendments finalized in this 
document incorporate additional changes to 27 CFR 26.276, 27.137, and 
26.292. As proposed in Notice No. 159, amended Sec. Sec.  26.276 and 
27.137 set forth record retention requirements for all records required 
by parts 26 and 27, respectively, and documents or copies of documents 
that support such records (including data filed with CBP pursuant to 
CBP requirements). Under the proposed regulations, and those finalized 
in this document, all such records and supporting documents are 
required to be retained in accordance with TTB recordkeeping 
requirements and made available to TTB or CBP upon request. TTB is 
adding in this final rule cross references in Sec. Sec.  26.276 and 
27.137 to recordkeeping and retention regulations issued by CBP, as 
such CBP regulations may affect the same records.
    Section 26.292 relates to shipments of industrial spirits or 
specially denatured spirits brought into the United States from the 
U.S. Virgin Islands. As proposed in Notice No. 159, amended Sec.  
26.292 would require, when filing electronically, the consignor or 
consignee to file with CBP the number associated with the consignee's 
permit issued under 27 CFR part 20 (for shipments of specially 
denatured spirits) or 27 CFR part 22 (for shipments of industrial 
spirits), along with the customs entry. TTB is clarifying in this final 
rule that it is the importer filing the entry that must file the number 
associated with the consignee's permit.

V. Regulatory Analyses and Notices

A. Executive Order 12866

    It has been determined that this rule is not a significant 
regulatory action as defined by Executive Order 12866. Therefore, a 
regulatory impact assessment is not required.

[[Page 94195]]

B. Regulatory Flexibility Act

    Pursuant to the requirements of the Regulatory Flexibility Act (5 
U.S.C. chapter 6), TTB certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities. 
While TTB believes the majority of businesses subject to this rule are 
small businesses, the regulatory amendments in this document will not 
have a significant impact on those small entities. Electronic filing 
will not be required under the changes. For entities filing on paper, 
the changes generally only require that certain additional information 
must be kept as a record. Furthermore, the majority of changes that TTB 
is making in this document will provide importers with more 
predictability regarding the data required at importation, and the 
electronic filing option will allow importers to more easily provide 
information required to import alcohol and tobacco products. This will 
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 may 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 this document can be divided into three classes with 
respect to their impact on entities: (1) Providing an electronic filing 
alternative to requirements to submit paper documents to U.S. Customs 
and Border Protection (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 change to address the 
certificate of label approval (COLA) for alcohol beverages. 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 instead requiring 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.
    Examples of replacing reporting with recordkeeping are the changes 
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 will instead 
require that the importer obtain the certificate prior to importation 
and make it available only upon request by CBP or TTB. If filing TTB 
data electronically, at the filing of the entry, the importer must 
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.
    Examples of requiring new information are the requirements that 
importers that import alcohol or tobacco products subject to tax, and 
file TTB data electronically, must 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 will be required to maintain 
records of the information to be made available upon request. TTB 
believes that the impact of this change will be minimal because much of 
this information is already submitted to CBP for CBP purposes.
    In conclusion, while the entities affected by the amendments 
include a substantial number of small entities, the effects of the 
changes in this final 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 amendments 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 final rule will not have a significant 
economic impact on a substantial number of small entities. The final 
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 final 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 section 7805(f) of the Internal Revenue Code, TTB 
submitted the notice of proposed rulemaking (Notice No. 159, 81 FR 
40404, June 21, 2016) to the Chief Counsel for Advocacy of the Small 
Business Administration (SBA) for comment on the impact of these 
regulations. The SBA had no comment on the proposed rule.

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 rule that contain collections of information, either current or 
amended, 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.
    In conjunction with Notice No. 159, TTB submitted revisions to OMB 
control numbers 1513-0064, 1513-0056, 1513-0059, 1513-0062, 1513-0088, 
and 1513-0119 to OMB for review. Those revisions generally account for 
the regulatory amendments proposed in Notice No. 159 and finalized in 
this document. The revisions and their connections to the proposed 
regulatory amendments are described in detail in Notice No. 159, which 
also solicited comments regarding the information collection revisions. 
TTB received no comments in response to the revisions, and the 
revisions have now been approved by OMB.

[[Page 94196]]

    Following the revisions described in Notice No. 159, TTB submitted 
one clarifying revision to OMB control number 1513-0064 to OMB for 
approval. The amended regulations at Sec. Sec.  4.40, 5.51, and 7.31 
clarify that, if an importer is importing distilled spirits, wine, or 
malt beverages using another person's COLA, with the COLA holder's 
authorization, the importer must make proof of that authorization 
available to TTB or CBP upon request. While the estimated burden hours 
for OMB control number 1513-0064 put forth in Notice No. 159 did 
capture the submission of proof of a COLA holder's authorization, TTB 
did not specifically explain that this collection of information was 
being accounted for by OMB control number 1513-0064. TTB submitted a 
revision to OMB control number 1513-0064 to include that explanation, 
and TTB has received approval for that revision.

D. Administrative Procedures Act

    TTB finds good cause under 5 U.S.C. 553(d)(3) to dispense with the 
effective date limitation in 5 U.S.C. 553(d). A 30-day delayed 
effective date is unnecessary because the regulatory changes in this 
final rule that provide an electronic filing alternative to paper 
filing are optional. Further, a delay in the applicability of the new 
recordkeeping provisions contained in this final rule is unnecessary 
because TTB provided notice of these requirements on June 21, 2016 
through Notice No. 159 (81 FR 40404). Notice No. 159 explained that 
Executive Order 13659, ``Streamlining the Export/Import Process for 
America's Businesses'' mandated that agencies be able to utilize ITDS 
by December 31, 2016. The effective date of this final rule is December 
31, 2016, in accordance with the Executive Order.

List 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 is amending 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

[[Page 94197]]

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, or obtain authorization to use the COLA from 
the person to whom the COLA is issued. Products imported under another 
person's COLA are eligible for release only if each bottle or 
individual container to be imported bears the name (or trade name) and 
address of the person to whom the COLA was issued by TTB, and only if 
the importer using the COLA to obtain release of a shipment can 
substantiate that the person to whom the COLA was issued has authorized 
its use by the importer. 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 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, and proof of 
the COLA holder's authorization if applicable, 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 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.
* * * * *
    (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 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, issued by the appropriate entity as set 
forth in Sec. Sec.  4.45 and 27.140 of this chapter respectively, 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 
semicolon;
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

[[Page 94198]]

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 covering the distilled spirits from the appropriate TTB 
officer, or obtain authorization to use the COLA from the person to 
whom the COLA is issued. Products imported under another person's COLA 
are eligible for release only if each bottle or individual container to 
be imported bears the name (or trade name) and address of the person to 
whom the COLA was issued by TTB, and only if the importer using the 
COLA to obtain release of a shipment can substantiate that the person 
to whom the COLA was issued has authorized its use by the importer. 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 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, and proof of the COLA 
holder's authorization if applicable, 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), (d) introductory text, and (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 for consumption, and no person may remove such 
whiskies 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 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

[[Page 94199]]

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 for consumption, and no person shall remove such 
whiskies from customs custody for consumption, unless that person has 
obtained and is in possession of a certificate issued by an official 
duly authorized by the appropriate foreign government certifying:
* * * * *
    (e) Miscellaneous. Distilled spirits (other than Scotch, Irish, and 
Canadian whiskies, and Cognac) imported in bottles are not eligible for 
release from customs custody for consumption, and no person shall 
remove such spirits 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 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:


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, issued by an 
official duly authorized by the foreign government as set forth in 
Sec.  5.52, 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, or obtain 
authorization to use the COLA from the person to whom the COLA is 
issued. Products imported under another person's COLA are eligible for 
release only if each bottle or individual container to be imported 
bears the name (or trade name) and address of the person to whom the 
COLA was issued by TTB, and only if the importer using the COLA to 
obtain release of a shipment can substantiate that the person to whom 
the COLA was issued has authorized its use by the importer. 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, and proof of the COLA holder's authorization if 
applicable, 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.

[[Page 94200]]

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:
0
a. Adding paragraphs (d), (e), (f), and (g);
0
b. Revising the authority citation at the end of the section; and
0
c. Adding an Office of Management and Budget control number reference 
at the end of the section.
    The additions and revision 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)(1) 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) 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) 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.

[[Page 94201]]


(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 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;

[[Page 94202]]

    (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 revised 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. 
Furthermore, the appropriate TTB officer may require these records to 
be kept for an additional period of not more than three years in any 
case where the appropriate TTB officer determines retention necessary 
or advisable. (For record retention periods under CBP regulations, see 
19 CFR part 163.) Any records, or copies thereof, containing any of the 
information required by this part to be prepared, wherever kept, shall 
also be made available for inspection and copying.

(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 importer 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 importer 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:


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

[[Page 94203]]

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 26.297 and the undesignated center heading immediately 
before it are removed.

0
41. The heading of subpart Oa is revised to read as follows:

Subpart Oa--Transfer of Virgin Islands Distilled Spirits, Natural 
Wines, and Beer Without Payment of Tax, From Customs Custody to 
Internal Revenue Bond

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 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

[[Page 94204]]

    (5) Information identifying each product for Internal Revenue Code 
and/or FAA Act purposes.
    (c) Maintenance of substantiating records. 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 removing the Office of Management and Budget control 
number reference at the end of the section and adding in its place 
``(Approved by the Office of Management and Budget under control number 
1513-0064)''.

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

[[Page 94205]]

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)

(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.

[[Page 94206]]


(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 revisions 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. Section 27.137 is revised 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. Furthermore, the appropriate TTB officer 
may require these records to be kept for an additional period of not 
more than three years in any case where the appropriate TTB officer 
determines retention necessary or advisable. (For record retention 
periods under CBP regulations, see 19 CFR part 163.) Any records, or 
copies thereof, containing any of the information required by this part 
to be prepared, wherever kept, shall also be made available for 
inspection and copying.

(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;
    (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. In paragraph (a):
0
i. Removing the definitions of ``Importer'' and ``Natural wine''; and
0
ii. Revising the definition of ``Proper cellar treatment'';
0
b. Revising the introductory text of paragraph (b)(1); and
0
c. 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

[[Page 94207]]

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 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

[[Page 94208]]

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 the Office of Management and Budget control number reference 
``(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:
0
a. Removing the words ``filed in triplicate'';
0
b. Removing ``Sec.  31.263'' and adding in its place ``Sec.  31.203''; 
and
0
c. 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 paragraph (a) introductory text by 
removing the words ``, in triplicate,'' and 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)''.

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;

[[Page 94209]]

    (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:


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

[[Page 94210]]

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 without payment of tax, 
and no person may remove such products from customs custody without 
payment of 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 proprietor 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 to read as follows:


Sec.  41.265  Processed tobacco importation process.

    (a) General. In the case of processed tobacco imported into the 
United States, 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: November 14, 2016.
John J. Manfreda,
Administrator.
    Approved: November 21, 2016.
Timothy E. Skud,
Deputy Assistant Secretary, (Tax, Trade and Tariff Policy).
[FR Doc. 2016-29201 Filed 12-21-16; 8:45 am]
BILLING CODE 4810-31-P