[Federal Register Volume 86, Number 162 (Wednesday, August 25, 2021)]
[Proposed Rules]
[Pages 47429-47433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18205]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 5

[Docket No. TTB-2021-0008; Notice No. 205]
RIN 1513-AC61


Proposed Addition of Singani to the Standards of Identity for 
Distilled Spirits

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) proposes to 
amend the regulations that set forth the standards of identity for 
distilled spirits to include Singani as a type of brandy that is a 
distinctive product of Bolivia. This proposal follows a joint petition 
submitted by the Plurinational State of Bolivia and Singani 63, Inc., 
and subsequent discussions with the Office of the United States Trade 
Representative. TTB invites comments on this proposed amendment to its 
regulations, including comments on its proposal to authorize a minimum 
bottling proof of 35 percent alcohol by volume (or 70[deg] proof) for 
Singani.

DATES: Comments must be received on or before October 25, 2021.

ADDRESSES: You may electronically submit comments to TTB on this 
proposal, and view copies of this document, its supporting materials, 
and any comments TTB receives on it within Docket No. TTB-2021-0008 as 
posted at https://www.regulations.gov. A direct link to that docket is 
available on the TTB website at https://www.ttb.gov/distilled-spirits/notices-of-proposed-rulemaking under Notice No. 205. Alternatively, you 
may submit comments via postal mail to the Director, Regulations and 
Ruling Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G 
Street NW, Box 12, Washington, DC 20005. Please see the Public 
Participation section of this document for further information on the 
comments requested regarding this proposal and on the submission, 
confidentiality, and public disclosure of comments.

FOR FURTHER INFORMATION CONTACT: Trevar D. Kolodny, Regulations and 
Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G 
Street NW, Box 12, Washington, DC 20005; telephone 202-453-2226.

SUPPLEMENTARY INFORMATION:

[[Page 47430]]

Background on the Labeling of Distilled Spirits

TTB Authority

    Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 
codified in the United States Code at 27 U.S.C. 205(e), authorizes the 
Secretary of the Treasury (the Secretary) to prescribe regulations 
relating to the packaging, marking, branding, labeling, and size and 
fill of containers of alcohol beverages that will prohibit consumer 
deception and provide consumers with adequate information as to the 
identity and quality of the product. Section 105(e) of the FAA Act also 
generally requires bottlers and importers of alcohol beverages to 
obtain certificates of label approval (COLAs) prior to bottling or 
importing alcohol beverages for sale in interstate commerce.
    TTB administers the FAA Act pursuant to section 1111(d) of the 
Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The 
Secretary has delegated various authorities through Treasury Department 
Order 120-01 (Revised), 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 this law.
    Part 5 of title 27 of the Code of Federal Regulations (27 CFR part 
5) sets forth the regulations implementing those provisions of section 
105(e) of the FAA Act as they pertain to distilled spirits.

Certificates of Label Approval

    TTB regulations at 27 CFR 5.51 prohibit the release of bottled 
distilled spirits from customs custody for consumption unless the 
person removing the distilled spirits has obtained and is in possession 
of a COLA covering the product. The bottles must bear labels identical 
to the labels appearing on the face of the certificate, or labels with 
changes authorized by TTB. The TTB regulations at 27 CFR 5.55 also 
generally prohibit the bottling or removal of distilled spirits from a 
distilled spirits plant unless the proprietor possesses a COLA covering 
the labels on the bottle.

Classes and Types of Spirits

    The TTB regulations at 27 CFR 5.22 establish standards of identity 
for distilled spirits products and categorize these products according 
to various classes and types. As used in Sec.  5.22, the term ``class'' 
refers to a general category of spirits. Currently, there are 12 
different classes of distilled spirits set out in Sec.  5.22, such as 
whisky, rum, gin, and brandy. As used in Sec.  5.22, the term ``type'' 
refers to a subcategory within a class of spirits. For example, 
``Cognac'' and ``Pisco'' are types of brandy, and ``Cacha[ccedil]a'' is 
a type of rum.
    The TTB labeling regulations at 27 CFR 5.32(a)(2) and 5.35 require 
that the class and type of distilled spirits appear on the product's 
label. These regulations provide that the class and type must be stated 
in conformity with Sec.  5.22 of the TTB regulations if defined 
therein. Otherwise, Sec.  5.35 requires that the product must be 
designated in accordance with trade and consumer understanding thereof, 
or, if no such understanding exists, by a distinctive or fanciful name, 
and in either case (with limited exceptions), followed by a truthful 
and adequate statement of composition.

Classification of Singani

    ``Singani'' is a term recognized by the Plurinational State of 
Bolivia (Bolivia) as a designation for an alcohol beverage product that 
is distilled from grape wine or grape pomace and produced in certain 
delimited parts of Bolivia. Under current TTB distilled spirits 
labeling regulations, Singani products are generally classified as 
brandies. Section 5.22(d) sets forth the standard of identity for 
brandy as follows:

    Class 4; brandy. ``Brandy'' is an alcoholic distillate from the 
fermented juice, mash, or wine of fruit, or from the residue 
thereof, produced at less than 190[deg] proof in such manner that 
the distillate possesses the taste, aroma, and characteristics 
generally attributed to the product, and bottled at not less than 
80[deg] proof. Brandy, or mixtures thereof, not conforming to any of 
the standards in paragraphs (d)(1) through (9) of this section shall 
be designated as ``brandy'', and such designation shall be 
immediately followed by a truthful and adequate statement of 
composition.

    In Sec.  5.22, paragraphs (d)(1) through (9) categorize the 
specific types of brandy. As described by petitioners Singani 63, Inc. 
(Singani 63) and Bolivia, Singani may meet the criteria of several of 
these types of brandy, such as ``fruit brandy'' under paragraph (d)(1), 
or ``pomace brandy'' (including ``grappa brandy'') under paragraph 
(d)(5), depending on the amount of pomace used.
    In Sec.  5.22, paragraph (d)(1) states that fruit brandy, derived 
from grapes, shall be designated as ``grape brandy'' or ``brandy.'' 
That regulation also generally requires brandies derived from grapes 
(other than neutral brandy, pomace brandy, marc brandy, grappa brandy, 
Pisco, Pisco Per[uacute], or Pisco Chileno) that have been aged in oak 
barrels for less than two years to be labeled as ``immature.'' The 
Bolivian standards submitted by petitioners contain no aging 
requirements, and petitioners' submissions suggest that, unlike many 
grape brandies, Singani is generally not aged in wood. Accordingly, 
under current TTB regulations, a Singani product classified as a grape 
brandy under paragraph (d)(1) would need to be labeled as an immature 
brandy unless it was aged in oak barrels for at least two years.
    According to information submitted by the petitioners, under the 
standards set forth by Bolivia, certain categories of Singani may have 
a minimum alcohol content by volume of as low as 35 percent. However, 
under Sec.  5.22(d), all brandy must be bottled at not less than 
80[deg] proof, or 40 percent alcohol by volume. Thus, under TTB's 
current regulations, only Singani products bottled at a minimum alcohol 
content by volume of 40 percent may be labeled as any of the types of 
brandy specifically defined under the standard of identity in Sec.  
5.22(d). A Singani product bottled at less than 40 percent alcohol by 
volume could be labeled as a ``diluted'' brandy in accordance with 
Ruling 75-32 of the Bureau of Alcohol, Tobacco and Firearms (ATF) 
(TTB's predecessor agency), or as a distilled spirits specialty product 
bearing a statement of composition and fanciful name as required under 
Sec.  5.35(a). Possible statements of composition for such a specialty 
product could include ``spirits distilled from grapes'' or ``grape 
spirits.''

Singani Petitions and Letters

Petitions and Related Letters

    TTB received a petition from Singani 63, a distilled spirits 
importer, dated November 18, 2014, proposing that TTB amend its 
regulations to recognize Singani as a type of brandy that is a 
distinctive product of Bolivia. In support of this petition, Bolivia 
submitted letters to TTB in December 2015 and January 2017. Singani 63 
also submitted a letter to TTB in June 2017 that provided additional 
information related to the petition.
    In its petition, Singani 63 stated that TTB's recognition of 
Singani as a distinctive product would benefit consumers by informing 
them that the product was produced and labeled in compliance with 
Bolivia's laws. It also asserted that Singani is a product that is 
distinct from other types of brandy. Furthermore, both Singani 63 and 
Bolivia indicated that Bolivia had established a legal standard for 
Singani as an exclusively Bolivian product.

[[Page 47431]]

    In response to these submissions, TTB issued letters in February 
and October of 2017, in which TTB addressed the petitioner's request 
for rulemaking and identified several deficiencies in the petition and 
its supporting documents. For instance, TTB noted that the submitted 
documents lacked substantiating information regarding Bolivia's 
standards for the production of Singani. Accordingly, TTB did not 
undertake rulemaking at that time to amend its regulations as proposed 
in Singani 63's petition.
    TTB subsequently received a joint petition from Singani 63 and 
Bolivia in November 2018, again proposing that TTB recognize Singani as 
a type of brandy that is a distinctive product of Bolivia. The 2018 
joint petition contained additional information in support of its 
regulatory proposal, including official translations of Bolivian laws 
and decrees governing the production of Singani.

2020 U.S.-Bolivian Exchange of Letters on Unique Distilled Spirits

    Following discussions between officials of Bolivia and the Office 
of the United States Trade Representative (USTR), and after 
consultations between USTR and TTB, the United States Trade 
Representative and Bolivia's Minister of Foreign Affairs exchanged 
letters on January 6, 2020. The exchange of letters agreed upon a 
procedure that could potentially lead each party to recognize as 
distinctive certain distilled spirits products produced in the other 
party's territory.
    The exchange of letters provides that the United States shall 
endeavor to publish a Notice of Proposed Rulemaking to promulgate a 
regulation that would provide that Singani is a type of brandy that is 
a distinctive product of Bolivia. The exchange of letters further 
provides that if, following this proposed rule, the United States 
publishes a final rule announcing the promulgation of a regulation 
establishing Singani as a type of brandy that is a distinctive product 
of Bolivia, then Bolivia shall, within thirty (30) days thereafter, 
recognize Bourbon Whiskey and Tennessee Whiskey as distinctive products 
of the United States. Following such recognition, Bolivia shall 
prohibit the sale within Bolivia of any product as Bourbon, Bourbon 
Whiskey, or Tennessee Whiskey, if it has not been manufactured in the 
United States in accordance with the laws and regulations of the United 
States governing the manufacture of Bourbon Whiskey and Tennessee 
Whiskey. These protections also apply to products spelled as ``Bourbon 
Whisky'' or ``Tennessee Whisky.''

Singani Production

    The Bolivian decrees and regulations submitted with the 2018 joint 
petition, which are included in the rulemaking docket, establish that 
Bolivia defines ``Singani'' as a brandy product of Bolivia. Of the 
Bolivian decrees and regulations submitted, Bolivian Standard NB 324001 
contains the most specific standards for Singani. Among other 
requirements, NB 324001 requires that Singani be obtained exclusively 
from vitis vinifera grapes grown in the traditional ``zones of origin'' 
at a minimum altitude of 1,600 meters above sea level. NB 324001 lists 
several different categories of Singani, some of which have more 
specific requirements, such as requiring the product to be made from 
Muscat of Alexandria grapes specifically. NB 324001 classifies Singani 
in the group ``Brandies and liquors.''
    In a prior rulemaking, TTB has distinguished Singani from Pisco, 
which is a type of grape brandy manufactured in Peru or Chile in 
accordance with the laws and regulations of those countries. In 2013, 
TTB updated its labeling regulations to add Pisco as a type of brandy 
that is manufactured only in Peru and Chile. In regard to brandy 
produced in Bolivia, TTB determined that it would not recognize Pisco 
as a type of brandy produced in that country. See T.D. TTB-113 (78 FR 
28739, May 16, 2013). TTB stated that Bolivia maintains standards for 
Singani but not for Pisco, and cited other evidence suggesting that 
Pisco and Singani are different products.

TTB Regulatory Proposal

    After reviewing the petitions, the regulations on the standards of 
identity in 27 CFR part 5, TTB's Certificate of Label Approval (COLA) 
database, the exchange of letters between USTR and Bolivia's Minister 
of Foreign Affairs, and the relevant laws and regulations of Bolivia, 
TTB has determined that amending the standards of identity regulations 
at Sec.  5.22 to recognize Singani as a distinctive product of Bolivia 
merits consideration and public comment, as invited in this notice of 
proposed rulemaking.
    TTB believes that Singani generally meets the U.S. standard for 
brandy and should be classified as a type of brandy. TTB also believes 
that evidence suggests that the generally recognized geographical 
limits of the Singani-producing areas do not extend beyond the 
boundaries of Bolivia, and that Singani production is not associated 
with any areas outside of Bolivia. Moreover, the results of a search of 
TTB's COLA database did not show any approved COLAs that use the term 
``Singani'' as the brand name or fanciful name, or as part of the brand 
name or fanciful name, for distilled spirits produced outside Bolivia.
    Therefore, this document proposes to amend the standard of identity 
in Sec.  5.22(d) by adding Singani as a type of brandy derived from 
grapes that is manufactured in Bolivia in compliance with the laws and 
regulations of Bolivia governing the manufacture of Singani for 
consumption in that country. If TTB recognizes Singani as a type of 
brandy as proposed, it would be permissible for Singani imported and 
sold within the United States to simply be labeled as ``Singani'' 
without the term ``brandy'' on the label, in the same way that products 
labeled with such type designations as ``Cognac'' or ``Pisco'' are not 
required to also bear the designation ``brandy.''
    The other geographically distinctive types of brandy defined in 
Sec.  5.22(d), Cognac and Pisco, are defined as grape brandies distinct 
to their respective places of origin. However, given that Singani could 
also meet the criteria of other types of brandies (such as pomace 
brandy under Sec.  5.22(d)(5), depending on the amount of pomace used), 
the proposed regulatory language describes Singani as ``brandy derived 
from grapes'' rather than as a ``grape brandy.''
    TTB notes that the Bolivian standard allows products designated as 
Singani to have an alcohol content ranging from 35 to 45 percent 
alcohol by volume, depending on the type of Singani produced. Because 
the Bolivian standard allows Singani to have an alcohol content as low 
as 35 percent alcohol by volume (or 70[deg] proof), TTB is proposing to 
exempt Singani from the general requirement that brandy be bottled at 
not less than 80[deg] proof (40 percent alcohol by volume) and is 
instead proposing a standard for Singani that would include products 
bottled at not less than 70[deg] proof (35 percent alcohol by volume) 
in accordance with the laws and regulations of Bolivia. TTB regulations 
have not previously authorized bottling proofs for a type of product 
that are below the minimum prescribed for the product's class 
designation, even when a foreign standard permits a lower proof, so TTB 
is soliciting comment on authorizing this standard for Singani.
    In addition, the regulation at Sec.  5.22(d)(1) generally requires 
that brandy derived from grapes that has been stored in oak containers 
for less than two years must be labeled with the word ``immature.'' 
However, it also lists

[[Page 47432]]

several types of brandy (specifically neutral brandy, pomace brandy, 
marc brandy, grappa brandy, Pisco, Pisco Per[uacute], and Pisco 
Chileno) that are exempt from this requirement. Because the Bolivian 
standards for Singani contain no specific aging requirements, TTB is 
proposing to amend Sec.  5.22(d)(1) to clarify that Singani is likewise 
exempt from the requirement that it be labeled with the word 
``immature.''

Effect on Currently Approved Labels

    If finalized, this amendment to the TTB regulations would revoke by 
operation of regulation any COLA that uses the term ``Singani'' as a 
designation for a distilled spirits product that was not manufactured 
in Bolivia in accordance with the laws and regulations of Bolivia 
governing the manufacture of Singani for consumption in that country. 
TTB has searched its COLA database and does not believe that this 
rulemaking will affect any existing labels.

Public Participation

Comments Invited

    TTB invites comments from interested members of the public on this 
proposed rule, including on whether the proposed amendment would have 
an adverse impact on owners of U.S. trademarks and on the extent to 
which distilled spirits labeled as ``Singani'' are produced outside 
Bolivia. Although information currently before TTB suggests that all 
distilled spirits currently sold in the United States with ``Singani'' 
on the label are produced in Bolivia, comments on the extent of 
production of Singani outside Bolivia, and on whether any existing 
labels will be affected by this proposal, will assist TTB in 
determining whether Singani should be recognized as a distinctive 
product of Bolivia.
    TTB is also soliciting comments on its proposal to authorize a 
minimum bottling proof of 35 percent alcohol by volume (or 70[deg] 
proof) for Singani. Because Bolivian standards authorize this 70[deg] 
proof minimum, TTB is proposing to authorize the same minimum for 
purposes of the TTB regulations, even though Sec.  5.22(d) generally 
requires that brandies be bottled at not less than 80[deg] proof.
Submitting Comments
    You may submit comments on this proposal as an individual or on 
behalf of a business or other organization via the Regulations.gov 
website or via postal mail, as described in the ADDRESSES section of 
this document. Your comment must reference Notice No. 205 and must be 
submitted or postmarked by the closing date shown in the DATES section 
of this document. You may upload or include attachments with your 
comment. You also may submit a comment requesting a public hearing on 
this proposal. The TTB Administrator reserves the right to determine 
whether to hold a public hearing. If TTB schedules a public hearing, it 
will publish a notice of the date, time, and place for the hearing in 
the Federal Register.

Confidentiality and Disclosure of Comments

    All submitted comments and attachments are part of the rulemaking 
record and are subject to public disclosure. Do not enclose any 
material in your comments that you consider confidential or that is 
inappropriate for disclosure.
    TTB will post, and you may view, copies of this document, its 
supporting materials, and any comments TTB receives about this proposal 
within the related Regulations.gov docket. In general, TTB will post 
comments as submitted, and it will not redact any identifying or 
contact information from the body of a comment or attachment.
    Please contact TTB's Regulations and Rulings division by email 
using the web form available at https://www.ttb.gov/contact-rrd, or by 
telephone at 202-453-2265, if you have any questions regarding comments 
on this proposal or to request copies of this document, its supporting 
materials, or the comments received in response.

Regulatory Analysis and Notices

Regulatory Flexibility Act

    Pursuant to the requirements of the Regulatory Flexibility Act (5 
U.S.C. chapter 6), TTB certifies that this proposed rule, if adopted, 
would not have a significant economic impact on a substantial number of 
small entities. The proposed rule only amends the standards of identity 
for brandy at 27 CFR 5.22(d) and imposes no new reporting, 
recordkeeping, or other administrative requirements. Therefore, no 
regulatory flexibility analysis is required.

Executive Order 12866

    It has been determined that this proposed rule is not a significant 
regulatory action as defined by Executive Order 12866 of September 30, 
1993. Therefore, no regulatory assessment is required.

Drafting Information

    Trevar D. Kolodny of the Regulations and Rulings Division, Alcohol 
and Tobacco Tax and Trade Bureau, drafted this notice of proposed 
rulemaking.

List of Subjects in 27 CFR Part 5

    Advertising, Alcohol and alcoholic beverages, Consumer protection, 
Customs duties and inspection, Imports, Labeling, Liquors, Packaging 
and containers, and Reporting and recordkeeping requirements.

Proposed Regulatory Amendment

    For the reasons discussed in the preamble, TTB proposes to amend 
title 27, chapter I, part 5, Code of Federal Regulations, as follows:

PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS

0
1. The authority citation for part 5 continues to read as follows:

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

Subpart C--Standards of Identity for Distilled Spirits

0
2. Section 5.22 is amended by:
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a. Revising paragraph (d) introductory text;
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b. In paragraph (d)(1), revising the third sentence; and
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c. Adding new paragraph (d)(10).
    The revisions and addition read as follows:


Sec.  5.22   The standards of identity.

* * * * *
    (d) Class 4; brandy. ``Brandy'' is an alcoholic distillate from the 
fermented juice, mash, or wine of fruit, or from the residue thereof, 
produced at less than 190[deg] proof in such manner that the distillate 
possesses the taste, aroma, and characteristics generally attributed to 
the product, and bottled at not less than 80[deg] proof except as 
otherwise provided in paragraph (d)(10) of this section. Brandy, or 
mixtures thereof, not conforming to any of the standards in paragraphs 
(d)(1) through (10) of this section shall be designated as ``brandy'', 
and such designation shall be immediately followed by a truthful and 
adequate statement of composition.
    (1) * * * Fruit brandy, derived from grapes, shall be designated as 
``grape brandy'' or ``brandy'', except that in the case of brandy 
(other than neutral brandy, pomace brandy, marc brandy, grappa brandy, 
Pisco, Pisco Per[uacute], Pisco Chileno, or Singani) distilled from the 
fermented juice, mash, or wine of grapes, or the residue thereof, which 
has been stored in oak containers for less than 2 years, the statement 
of class and type shall be immediately preceded, in

[[Page 47433]]

the same size and kind of type, by the word ``immature''. * * *
* * * * *
    (10) ``Singani'' is brandy derived from grapes that is manufactured 
in Bolivia in accordance with the laws and regulations of Bolivia 
governing the manufacture of Singani for consumption in that country, 
and includes Singani bottled at not less than 70[deg] proof in 
accordance with such laws and regulations.
* * * * *

    Signed: July 21, 2021.
Mary G. Ryan,
Administrator.
    Approved: July 23, 2021.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2021-18205 Filed 8-24-21; 8:45 am]
BILLING CODE 4810-31-P