**From:** NABI \[beverageimporters@nabi-inc.org\]\
**Sent:** Friday, October 21, 2005 4:54 PM\
**To:** Rulemaking, TTB\
**Subject:** Comment - Notice No. 51

October 24, 2005

Frank Foote, Chief

Regulations and Procedures Division

Alcohol and Tobacco Tax and Trade Bureau

P. O. Box 14412

Washington, DC 20044-4412

> [ATTN: Notice No. 51 ]{.underline}

Dear Mr. Foote:

This comment is being submitted by the members of the National
Association of Beverage Importers, Inc (NABI). NABI members are
responsible for the importation of a significant portion of wine and
spirits imported into the United States annually. NABI also represents a
segment of the industry that imports 95% of all beer imported into the
United States each year. In view of the fact that NABI represents wine
importers that import significant quantities of wine from countries that
currently do not have reciprocal wine importation agreements with the
United States, we have a high level of interest in this proposed
rulemaking. The following are our specific comments concerning the
temporary and proposed final rule.

[Importers who do not buy their wines directly from the foreign
producer.]{.underline}

NABI members are not aware of any particular problems that the proposed
regulations will cause an importer who does not buy wine directly from
the foreign producer.

Importers that buy their wines from a broker or negotiante should be
able to get the necessary certification from the broker or negotiante.

[Certification Retention]{.underline}

The temporary regulation and NPRM No. 51 make it clear that the
"importer" is required to maintain a copy of the certification on file
for appropriate inspection by a TTB representative. We strongly agree
with the TTB decision not to make the certification a part of the U.S.
Customs entry process. Instead, TTB chose to require the importer to
"maintain the certification in their records where TTB officers can
inspect them as may be necessary." However, the temporary regulation and
NPRM No. 51 fail to define the term importer. As TTB knows, there are
two different types of importers that hold TTB importer's permits. In
the industry, one importer is known as the "authorized" importer and the
other is known as the "importer of record." The authorized importer is
authorized by the foreign supplier to import his/her wine into the
United States. The importer of record, on the other hand, is the
importer that physically imports the wine into the United States, most
often using a Certificate of Label Approval (COLA) owned by the
authorized importer.

NABI along with other industry associations has had ongoing discussions
with TTB representatives in an effort to develop a mutually agreed upon
TTB policy regarding the physical retention of the COLA. It is our
understanding that TTB has decided that the COLA owner is required to
maintain the COLA on file for inspection by a TTB officer. It is further
understood that the COLA owner must provide the "importer of record"
with a copy of the COLA at the time of importation, and upon request by
the TTB.

NABI members believe that the COLA owner should be required to keep a
copy of the certification, cross referenced to the COLA to which it
applies.

[Wine Blending]{.underline}

A unique problem is created when the foreign supplier produces a wine
that is a blend of wines from multiple suppliers. Must each of the
producers of the wines used in the blend certify or is a certification
only required from the producers who blended the wines and created the
final product that will be imported and sold to the consumer?

NABI members believe that the temporary and proposed final regulations
do not adequately address the issues of the blending of wines and
fermented juice. One NABI member asked the following question:
"Producers may purchase fermented juice to be blended together with
other fermented juice. One or both may have been cellared (fermented) at
another facility. If the final producer purchases fermented wines to
bottle, must all producers in the process certify the wine(s) or must
the final producer obtain lab analysis and attest to all cellaring
conditions during the in wines' evolution?"

Perhaps putting it another way would help clarify the issue. Must the
certification and lab analysis relate only to the finished product
(wine) in the bottle or is it required of all wines used in a blend.

[Summary]{.underline}

We thank you for this opportunity to comment on the proposed
regulations. NABI members do not believe the proposed regulations will
cause any special problems for importers who do not buy their wines
directly from the foreign producer. However, we do believe TTB needs to
clarify the records (certification) retention issue outlined in the body
of this comment.

One important issue not addressed in the proposed regulations deals with
the certification and laboratory analysis required for a blended wine.
NABI members are aware of the fact that in order for a foreign supplier
to produce a unique wine, which when blended is better than its
component parts, or to maintain continuity of supply for certain
brands/labels, may buy bulk wines from more than one source. We believe
that this practice is common in appellations like Burgundy where many of
the vineyards are quite small. In our opinion, the certification
requirement should only relate to the finished product being exported to
the United States.

Again, thank you for this opportunity to comment.

Sincerely,

Robert J. Maxwell

Robert J. Maxwell

President - NABI