[Federal Register Volume 70, Number 163 (Wednesday, August 24, 2005)]
[Rules and Regulations]
[Pages 49479-49486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-16772]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / 
Rules and Regulations

[[Page 49479]]



DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 4, 24 and 27

[T.D. TTB-31]
RIN 1513-AB00


Certification Requirements for Imported Natural Wine (2005R-002P)

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

ACTION: Temporary rule; Treasury decision.

-----------------------------------------------------------------------

SUMMARY: This temporary rule implements the new certification 
requirements regarding production practices and procedures for imported 
natural wine contained in section 2002 of the Miscellaneous Trade and 
Technical Corrections Act of 2004, which amended section 5382 of the 
Internal Revenue Code of 1986. We are amending the wine regulations to 
incorporate these changes. We also are soliciting comments from all 
interested parties on the implementation of these new requirements 
through a notice of proposed rulemaking published elsewhere in this 
issue of the Federal Register.

DATES: Temporary rule effective August 24, 2005.

FOR FURTHER INFORMATION CONTACT: Gail Davis, International Trade 
Division, Alcohol and Tobacco Tax and Trade Bureau (202-927-8110).

SUPPLEMENTARY INFORMATION:

Background

    This temporary rule implements section 2002 of the Miscellaneous 
Trade and Technical Corrections Act of 2004, Public Law 108-429, 118 
Stat. 2434 (``the Act''), signed by President Bush on December 3, 2004. 
Section 2002 of the Act revised section 5382(a) of the Internal Revenue 
Code of 1986 (IRC), 26 U.S.C. 5382(a), which sets forth standards 
regarding what constitutes proper cellar treatment of natural wine. The 
Alcohol and Tobacco Tax and Trade Bureau (TTB) is responsible for the 
administration of the IRC provisions relating to wine.
    The revision of section 5382(a) took effect on January 1, 2005, and 
involved the following two principal substantive changes: (1) The 
addition of a new paragraph (1)(B) to provide that, in the case of wine 
produced and imported subject to an international agreement or treaty, 
proper cellar treatment of natural wine includes those practices and 
procedures acceptable to the United States under the agreement or 
treaty; and (2) the addition of a paragraph (3) setting forth a new 
certification requirement regarding production practices and procedures 
for imported natural wine produced after December 31, 2004. The new 
certification provision directs the Secretary of the Treasury to accept 
the practices and procedures used to produce the wine if, at the time 
of importation, one of the following conditions is met:
    1. The Secretary has on file or is provided with a certification 
from the government of the producing country, accompanied by an 
affirmed laboratory analysis, that the practices and procedures used to 
produce the wine constitute proper cellar treatment under regulations 
prescribed by the Secretary;
    2. The Secretary has on file or is provided with a certification 
required by an international agreement or treaty covering proper cellar 
treatment, or the wine is covered by an international agreement or 
treaty covering proper cellar treatment that does not require a 
certification; or
    3. In the case of an importer that owns or controls or that has an 
affiliate that owns or controls a winery operating under a basic permit 
issued by the Secretary, the importer certifies that the practices and 
procedures used to produce the wine constitute proper cellar treatment 
under regulations prescribed by the Secretary. For purposes of this 
provision, the new paragraph (3) text also defines ``affiliate'' as 
having the meaning contained in section 117(a)(4) of the Federal 
Alcohol Administration Act (27 U.S.C. 211(a)(4)) and as including ``a 
winery's parent or subsidiary or any other entity in which the winery's 
parent or subsidiary has an ownership interest.''
    Based on the January 1, 2005, effective date of the section 2002 
statutory change and the fact that the new requirements apply to 
natural wine produced on or after that date, TTB believes that proper 
administration and enforcement of those requirements necessitates the 
adoption of implementing regulations as a temporary rule with immediate 
effect. TTB believes that such implementing action will ensure that 
affected industry members have sufficient advance knowledge of the 
regulatory requirements, and TTB notes in this regard that, given the 
``produced'' statutory standard, the vast majority of, if not all, wine 
importers will not have to meet the certification requirements until 
the summer of 2005.

Public Meeting; Submission of Comments

    TTB held a public meeting regarding these new requirements on 
December 15, 2004, in Washington, DC, which was announced in Notice No. 
26, published in the Federal Register (69 FR 71873) on December 10, 
2004. The purpose of the meeting was to advise the public of TTB's 
plans for implementation of the certification requirements and to 
answer questions from the public regarding these provisions. TTB also 
encouraged, both at the meeting and in Notice No. 26, the submission of 
written comments regarding its implementation plans. The public comment 
period ended January 15, 2005.
    TTB received eleven comments regarding implementation of the new 
requirements. Comments were received from: Allied Domecq, on behalf of 
Allied Domecq Wines USA; the government of Australia; the California 
Fine Wine Alliance; the government of Canada; the Comit[eacute] 
Europ[eacute]en des Entreprises Vins; the Distilled Spirits Council of 
the United States; the F[eacute]d[eacute]ration des Exportateurs de 
Vins et Spiritueux de France; Green Mountain Beverage; Kalik Lewin, on 
behalf of the Wine Institute; the National Association of Beverage 
Importers, Inc.; and the government of New Zealand.
    TTB took into consideration the comments of the parties mentioned 
above in drafting this document. The principal points made by the 
comment submitters, TTB's responses regarding

[[Page 49480]]

those comments, and TTB's observations on other aspects of the 
implementing regulatory texts are set forth below.
    The regulatory text to implement the section 2002 statutory changes 
is set forth in this document as a new Sec.  27.140 within subpart I 
(Importer's Records and Reports) of part 27 of the TTB regulations, 
which concerns the importation of distilled spirits, wines, and beer.
    The document includes conforming cross-reference changes to 
Sec. Sec.  24.301 and 24.302 of the TTB regulations (27 CFR 24.301 and 
24.302), which concern records applicable to imported bulk still and 
effervescent wines received in bond.
    The document also includes a new requirement in our regulations 
promulgated under the labeling provisions of the Federal Alcohol 
Administration Act (FAA Act), 27 U.S.C. 205(e). This new provision is 
in a new paragraph (b) of 27 CFR 4.45, and provides that importers must 
submit copies of certifications to TTB for use in enforcing the 
labeling provisions of the FAA Act. These certifications will be made 
available to the public on the TTB Web site.

1. Filing of Certifications

    During the public meeting, TTB stated its intention not to require 
presentation of the certification as part of the customs entry process. 
TTB took this position based on the view that compliance with the 
statutory requirement could be adequately assured if importers simply 
maintain the certifications in their records where TTB officers can 
inspect them as may be necessary.
    Most of the comment submitters addressing this issue agreed with 
TTB's position, stating that it will be less burdensome to importers. 
However, two of them dissented. One contended that the statute requires 
importers to provide the certification, or at least proof that the 
certification is on file, to U.S. Customs and Border Protection at the 
time of importation. The second dissenting comment submitter argued 
that importers should file certifications with TTB, which would then 
maintain them in a database that would be available to other importers. 
On the other hand, another commenter urged TTB to confirm that the 
affirmed laboratory analyses would be treated as confidential 
information, asserting that such analyses would necessarily include 
sensitive proprietary information.
    TTB does not agree that the statutory language requires the 
certification to be presented as part of the customs entry process. 
Instead, we believe that the requirements of the amended IRC provision 
will be satisfied if importers maintain copies of the certifications in 
their records. Moreover, noting that the statute requires that the 
Secretary have ``on file'' or be ``provided with'' a certification, we 
believe the ``provided with'' standard is satisfied by a retention 
requirement because, under 27 CFR 27.137, any record required under 
part 27 must be retained and made available to TTB for inspection. 
Finally, we believe the record retention approach will be least 
burdensome for both the U.S. Government and the industry.
    However, as stated above, we have decided to require importers to 
submit a copy of the certification to TTB under regulations promulgated 
under the FAA Act. Section 105(e) of the FAA Act, 27 U.S.C. 205(e), 
authorizes TTB, as the delegate of the Secretary of the Treasury, to 
issue regulations that will ensure that alcohol beverage labels provide 
adequate information to consumers as to the identity and quality of the 
product. Pursuant to this authority, we have issued regulations 
requiring both domestic and imported wines to be labeled with 
information regarding the class and type designation of the product. 
See 27 CFR part 4, subparts C and D. These regulations also set forth 
rules regarding the blending and cellar treatment of wine. See 27 CFR 
4.22.
    An importer's inability to provide a certification regarding proper 
cellar treatment may indicate that the wine has been treated in a 
fashion that would change the class and type designation under the 
pertinent regulations in part 4. Moreover, Congress by amending section 
5382 has indicated an increased concern with such treatment. 
Consequently, TTB will also require importers to submit certifications 
of natural wine as part of the label approval process and TTB may use 
such information for purposes of verifying the appropriate class and 
type designation of the wine under the labeling provisions of part 4.
    While TTB is requiring that the certification be submitted as part 
of the label approval process, labels for wines for which a 
certification is not yet available will be provisionally approved 
pending submission of the certification prior to the time of release 
from Customs custody. Certifications that are submitted subsequent to 
provisional approval must include the label approval number. 
Certifications submitted subsequent to provisional approval of the 
label approval should be submitted to the Director, Knowledge 
Management Staff, with the mailing address as Alcohol and Tobacco Tax 
and Trade Bureau, 1310 G Street NW., Suite 200E, Attention: Wine 
Certification Docket, Washington, DC 20220.
    Furthermore, an importer may rely on a certificate of label 
approval approved prior to the effective date of this regulatory 
change. In such a case, the importer consequently would not be required 
to obtain a new certificate of label approval, but must instead submit 
the required certification to the Director, Knowledge Management Staff, 
at the address indicated above before the wine in question is released 
from Customs custody.
    The temporary rule also provides that certifications submitted 
under section Sec.  4.45 shall be made available to the public on the 
TTB Internet Web site at www.ttb.gov, in the same way that approved 
labels are made available to the public. Consistent with the objectives 
of the FAA Act, TTB believes that making this information available to 
the public provides assurance to consumers that the wine was produced 
in accordance with acceptable practices. However, in order to minimize 
implementation time and costs, certifications will be displayed on a 
separate Web page. The certifications on the Web will be indexed to the 
label approval by the label approval number.
    We do not agree with the comment that suggested that the affirmed 
laboratory analyses necessarily included sensitive proprietary 
information that should be kept confidential. Unlike formulas, which 
include sensitive and confidential data about the formulation of 
products, the laboratory analysis merely sets out in summary form the 
percentage alcohol by volume, the total sulphur dioxide content (ppm), 
and the volatile acidity of the product. This is information that could 
be obtained by anyone who bought a bottle of the product in the 
marketplace and submitted the sample to a private laboratory for 
analysis.
    In many cases, the alcohol content of the wine is already on the 
label. TTB does not believe that the information included in the 
analysis is confidential or proprietary, and thus we have concluded 
that it may be made available to the public.
    Several comment submitters asked if the importer must obtain a 
certification for each shipment, or merely for the initial shipment of 
a specific wine. Others proposed that once one importer has imported a 
specific wine, other importers should be able to use the same 
certification.

[[Page 49481]]

    TTB believes if an importer has an original or copy of the 
certification in his or her possession at the time of the initial 
importation the statutory requirement will be met for multiple 
shipments of the same wine (that is, wine of the same brand, class or 
type, producer, and cellar treatment). Thus, the importer could import 
additional shipments of the same wine without obtaining a new 
certification, as long as the certification for the initial shipment is 
maintained in his or her records and continues to accurately apply to 
the wine in the subsequent shipments. In addition, because importers 
may use either an original or copy of a certification, different 
importers may use copies of the same certification.

2. Wines Produced Under an International Agreement

    Some comment submitters requested clarification on the scope of the 
provision regarding wine produced and imported subject to an 
international agreement or treaty. In response, the TTB position is 
that wines fall under this provision if they are imported from a 
country that has ratified an agreement that provides for acceptance by 
the United States of the enological practices of the exporting country. 
On the other hand, wines covered by agreements that do not provide for 
acceptance of enological practices will not qualify for inclusion under 
this provision.
    The comments also revealed some confusion over whether TTB would 
require some type of government certification for wines falling under 
this provision. In response, TTB notes that while the statute does 
mention a certification in this context, it refers only to a 
``certification, if any, as may be required by an international 
agreement or treaty under paragraph (1)(B).'' TTB does not believe that 
it is necessary to require retention of a certification if the terms of 
such an international agreement or treaty do not require a 
certification, because the existence of the agreement or treaty is 
sufficient for purposes of verification of the statutory standard by 
TTB. However, a different approach appears to be necessary under the 
terms of the statute if the international agreement or treaty provides 
for a certification. Accordingly, in this case the regulatory text 
requires the importer to have only the certification required under the 
agreement or treaty.

3. Importers Affiliated With a U.S. Winery

    A number of commenters requested clarification of what qualifies as 
an ``affiliate,'' while others stated that the statutory definition of 
affiliate is clear and does not need explanation. One commenter 
interpreted this provision as permitting an importer in this category 
to self-certify only wines produced by an affiliated winery. Another 
commenter questioned whether TTB would allow self-certification by an 
importer when the importer is controlled by the winery rather than the 
other way around.
    TTB has included in the regulatory text a definition of 
``affiliate'' that includes the terms of section 117(a)(4) of the 
Federal Alcohol Administration (FAA) Act as well as the additional 
definitional language added by section 2002 of the Act. The following 
points are noted regarding this definition:
    <bullet> The language added by section 2002 of the Act is included 
with the first part of the FAA Act definition because it appears to be 
more relevant there.
    <bullet> We have added the word ``controlling'' before the words 
``ownership interest'' to ensure consistency with the ``control'' 
concept in the existing FAA Act definition. In this regard, we do not 
believe that Congress intended to create an ambiguity by having a 
definition that contradicts its own terms.
    TTB believes that the statute allows an importer that has an 
affiliate that owns or controls a winery operating under a basic permit 
issued by the Secretary to self-certify any natural wine he or she 
imports, not just wine produced by its affiliated winery. With regard 
to the other comment, TTB believes that the statutory language does not 
provide for self-certification when the winery controls the importer.

4. Definition of Natural Wine

    As the new requirements apply only to ``natural'' wine, a number of 
comment submitters requested that TTB clarify the definition of natural 
wine. For example, some commenters questioned whether non-grape wines, 
wines under 7 percent alcohol by volume, or wines that are not 
``standard'' wines are included in the definition.
    TTB has included in the Sec.  27.140 text the definition of natural 
wine currently found in 27 CFR 24.10, which is based on the definition 
contained in section 5381 of the IRC. Although Congress had the 
opportunity to amend the definition of natural wine for purposes of the 
amendment made by section 2002 of the Act, it did not do so. 
Accordingly, the current definition of natural wine, which includes 
some wines made from fruits other than grapes as well as wines under 7 
percent alcohol by volume, applies in this regulatory context. Whether 
a wine falls within the definition of ``natural'' wine or not depends 
on how it is produced. Because the definition of ``standard'' wine 
under section 24.10 includes ``natural wine,'' a wine that is not a 
``standard wine'' cannot be a ``natural wine.''
    Two comment submitters asked if the alcohol content limitations in 
the definition of natural wine refer to ``acquired'' or ``actual'' 
alcohol, or to ``total'' alcohol (which includes the alcohol equivalent 
of residual sugar contained in the wine). Consistent with the approach 
taken throughout the U.S. wine regulations, the alcohol content 
limitations contained in the definition of natural wine have reference 
to the wine's ``actual'' alcohol by volume content, which does not 
include the alcohol equivalent of the residual sugar.

5. Certifying Government Agencies and Laboratories

    A few comment submitters suggested that TTB allow the required 
government certification to be from a quasi-governmental organization 
having a regulatory role in the country of origin. They pointed out 
that in some countries such organizations have significant regulatory 
authority. They also suggested that TTB should accept analyses not just 
from government laboratories, but also from laboratories that have been 
certified by the country of origin to conduct the analyses.
    TTB is aware of the fact that quasi-governmental organizations play 
a significant role in regulating some countries' wine industries. For 
this reason, TTB will accept the required certification from either a 
governmental or government-approved entity, provided that the entity 
has oversight or control over enological practices in the producing 
country under the laws of the producing country. Likewise, TTB 
understands that government laboratories in some countries may not 
easily be able to handle the additional work required by this 
certification requirement. TTB will therefore accept a laboratory 
analysis conducted by a laboratory certified by the government of the 
producing country.
    TTB expects that each country exporting wine to the United States 
that is subject to the government certification and laboratory analysis 
requirements of the statute will make available to TTB and the general 
public a list of its governmental or government-approved certifying 
entities and a list of its government or government-certified 
laboratories. To assist importers in verifying that the certification 
and laboratory analysis are from a proper source, TTB will maintain a 
list

[[Page 49482]]

containing all such available information on its Internet Web site.

6. Other Issues

    In addition to the points made above in connection with the 
submitted comments, TTB notes the following in regard to the new Sec.  
27.140 text:
    1. The definition of ``produced'' refers to removal from the 
fermenter. TTB believes that this constitutes an objective standard 
that identifies a specific, definable point in the wine production 
process.
    2. The definition of ``proper cellar treatment'' includes language 
regarding international agreements and treaties, to reflect the effect 
of the addition of new paragraph (1)(B) to section 5382(a).
    3. TTB must be able to determine if wine imported after December 
31, 2004, was produced on or before that date, particularly since 
significant quantities of wine produced both before and after the 
statutory cutoff date will be imported. However, TTB also recognizes 
that, as time goes on, the proportion of imported wine that consists of 
post-2004 production will increase, with a consequent increase in the 
recordkeeping burden on importers. In order to reduce the potential 
burden on importers, the regulatory text merely requires the 
maintenance of records (which the importer would already have in the 
normal course of business) to show that the wine was produced before 
December 31, 2004.

Paperwork Reduction Act

    The collections of information contained in this temporary rule 
have been reviewed by the Office of Management and Budget (OMB) in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) 
and, pending the receipt of public comments, approved under OMB control 
number 1513-0119. An agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless the 
collection of information displays a valid control number.
    The collections of information in this regulation are in Sec.  4.45 
and Sec.  27.140. The first information collection involves consumer 
information under the Federal Alcohol Administration Act. The second 
information collection is required by the Internal Revenue Code of 1986 
in connection with the importation of wine from foreign countries. 
Failure to provide the required information may result in 
administrative sanctions against the importer. The likely respondents 
are individuals and business or other for-profit institutions, 
including partnership, associations, and corporations.
    <bullet> Estimated total annual reporting and/or recordkeeping 
burden: 6,600 hours.
    <bullet> Estimated average annual burden per respondent/
recordkeeper: 1.65 hours.
    <bullet> Estimated number of respondents and/or recordkeeping: 
4,000.
    <bullet> Estimated annual number of responses: 20,000.
    Please refer to the related notice of proposed rulemaking published 
elsewhere in this issue of the Federal Register for the procedures for 
submitting comments on the collection of information.

Regulatory Flexibility Act

    For applicability of the Regulatory Flexibility Act (5 U.S.C. 601 
et seq.), please refer to the cross-referenced notice of proposed 
rulemaking published elsewhere in this issue of the Federal Register. 
Pursuant to section 7805(f) of the Internal Revenue Code, we will 
submit this temporary rule to the Chief Counsel for Advocacy of the 
Small Business Administration for comment on the impact of the 
temporary regulations.

Executive Order 12866

    We have determined that this temporary rule is not a significant 
regulatory action as defined in Executive Order 12866. Therefore, a 
regulatory assessment is not required.

Inapplicability of Prior Notice and Comment and Delayed Effective Date 
Requirements

    With respect to the provisions of these regulations that implement 
section 5382 of the Internal Revenue Code, it has been determined that 
sections 553(b) and (d)(3) of the Administrative Procedure Act (5 
U.S.C. chapter 5) do not apply. With respect to section 5382 and the 
provisions of these regulations issued under the authority of the 
Federal Alcohol Administration Act, it has been determined, pursuant to 
5 U.S.C. 553(b)(B) and (d), that good cause exists to issue these 
regulations without prior notice and public procedure, and without a 
delayed effective date. Because foreign wine subject to these 
regulations will begin entering the United States shortly, it is 
impracticable and contrary to the public interest to issue these 
regulations for prior notice and comment, and with a delayed effective 
date.
    Although we are not required to issue a prior notice of proposed 
rulemaking, we are soliciting comments from all interested parties on 
the implementation of these new requirements through a concurrent 
notice of proposed rulemaking published elsewhere in this issue of the 
Federal Register.

Drafting Information

    The principal author of this document was Jennifer K. Berry, 
Regulations and Procedures Division, Alcohol and Tobacco Tax and Trade 
Bureau. However, other personnel participated in its development.

List of Subjects

27 CFR Part 4

    Advertising, Customs duties and inspection, Imports, Labeling, 
Packaging and containers, Reporting and recordkeeping requirements, 
Trade practices, Wine.

27 CFR Part 24

    Administrative practice and procedure, Claims, Electronic fund 
transfers, Excise taxes, Exports, Food additives, Fruit juices, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Research, Scientific equipment, Spices and 
flavoring, Surety bonds, Vinegar, Warehouses, Wine.

27 CFR Part 27

    Alcohol and alcoholic beverages, Beer, Customs duties and 
inspection, Electronic funds transfers, Excise taxes, Imports, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Wine.

Amendments to the Regulations

0
For the reasons discussed in the preamble, TTB amends 27 CFR parts 4, 
24, and 27 as follows:

PART 4--LABELING AND ADVERTISING OF WINE

0
1. The authority citation for part 4 continues to read as follows:

    Authority: 27 U.S.C. 205, unless otherwise noted.


0
2. Section 4.45 is amended by revising the section heading, designating 
the existing text as paragraph (a), adding a heading to newly 
designated paragraph (a), and adding a new paragraph (b) to read as 
follows:


Sec.  4.45  Certificates of origin, identity and proper cellar 
treatment.

    (a) Origin and identity. * * *
    (b) Certification of proper cellar treatment of natural wine--(1) 
General. An importer of wine may be required to have in his or her 
possession at the time of release of the wine from customs custody a 
certification or may have to

[[Page 49483]]

comply with other conditions prescribed in Sec.  27.140 of this chapter 
regarding proper cellar treatment. If imported wine requires a 
certification under Sec.  27.140, the importer must provide a copy of 
that certification to TTB as follows:
    (i) The importer must attach a copy of the certification to the 
application for a certificate of label approval for the wine in 
question submitted under Sec.  13.21 of this chapter; or
    (ii) If a certification for the wine in question was not available 
when the importer submitted the application for label approval, the 
importer must submit a copy of the certification to the appropriate TTB 
officer prior to release from customs custody of the first shipment of 
the wine.
    (2) Validity of certification. A certification submitted under 
paragraph (b)(1) of this section is valid as long as the wine is of the 
same brand and class or type, was made by the same producer, was 
subjected to the same cellar treatment, and conforms to the statements 
made on the certification. Accordingly, if the cellar treatment of the 
wine changes and a new certification under Sec.  27.140 is required, an 
importer is required to submit a new certification for the wine even 
though it is subject to the same label approval.
    (3) Use of certification. TTB may use the information from a 
certification for purposes of verifying the appropriate class and type 
designation of the wine under the labeling provisions of this part. TTB 
will make certifications submitted under paragraph (b)(1) of this 
section available to the public on the TTB Internet Web site at 
www.ttb.gov.

PART 24--WINE

0
3. The authority citation for part 24 continues to read as follows:

    Authority: 5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042, 
5044, 5061, 5062, 5081, 5111-5113, 5121, 5122, 5142, 5143, 5173, 
5206, 5214, 5215, 5351, 5353, 5354, 5356, 5357, 5361, 5362, 5364-
5373, 5381-5388, 5391, 5392, 5511, 5551, 5552, 5661, 5662, 5684, 
6065, 6091, 6109, 6301, 6302, 6311, 6651, 6676, 7011, 7302, 7342, 
7502, 7503, 7606, 7805, 7851; 31 U.S.C. 9301, 9303, 9304, 9306.


0
4. Section 24.301 is amended by removing the word ``and'' at the end of 
paragraph (i), removing the period at the end of paragraph (j) and 
adding, in its place, a semicolon followed by the word ``and'', and 
adding a new paragraph (k) to read as follows:


Sec.  24.301  Bulk still wine record.

* * * * *
    (k) If the proprietor is an importer of wine to which the 
provisions of Sec.  27.140 of this chapter apply, any certification or 
other records required at the time of release from customs custody 
under that section.

0
5. Section 24.302 is amended by removing the word ``and'' at the end of 
paragraph (h), removing the period at the end of paragraph (i) and 
adding, in its place, a semicolon followed by the word ``and'', and 
adding a new paragraph (j) to read as follows:


Sec.  24.302  Effervescent wine record.

* * * * *
    (j) If the proprietor is an importer of wine to which the 
provisions of Sec.  27.140 of this chapter apply, any certification or 
other records required at the time of release from customs custody 
under that section.

PART 27--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER

0
6. 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, 5111, 5112, 5114, 5121, 
5122, 5124, 5201, 5205, 5207, 5232, 5273, 5301, 5313, 5382, 5555, 
6302, 7805.


0
7. Subpart I, Importer's Records and Reports, is amended by adding a 
new Sec.  27.140 to read as follows:


Sec.  27.140  Certification requirements for wine.

    (a) Definitions. When used in this section, the following terms 
have the meaning indicated:
    Affiliate means any one of two or more persons if one of such 
persons has actual or legal control, directly or indirectly, whether by 
stock ownership or otherwise, of the other or others of such persons, 
and includes a winery's parent or subsidiary or any other entity in 
which the winery's parent or subsidiary has a controlling ownership 
interest. An affiliate also means any one of two or more persons 
subject to common control, actual or legal, directly or indirectly, 
whether by stock ownership or otherwise.
    Importer means any person importing wine who must obtain a permit 
as provided in Sec.  27.55.
    Natural wine means the product of the juice or must of sound, ripe 
grapes or other sound, ripe fruit (including berries) made with any 
cellar treatment authorized by subparts F and L of part 24 of this 
chapter and containing not more than 21 percent by weight (21 degrees 
Brix de-alcoholized wine) of total solids.
    Produced, when used with reference to wine, means removed from the 
fermenter.
    Proper cellar treatment means a production practice or procedure 
authorized by subparts F and L of part 24 of this chapter and, 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) Certification--(1) General. Except as otherwise provided in 
paragraph (b)(2) of this section, an importer of natural wine must have 
an original or copy of a certification from the producing country 
stating that the practices and procedures used to produce the imported 
wine constitute proper cellar treatment. The certification:
    (i) Must be from a governmental or government-approved entity 
having oversight or control over enological practices in the producing 
country under the laws of that country;
    (ii) Must include the results of a laboratory analysis of the wine 
conducted either by a government laboratory of the producing country or 
by a laboratory certified by the government of the producing country; 
and
    (iii) Must be in the possession of the importer at the time of 
release of the wine from customs custody and may cover multiple 
importations provided that the wine in each case is of the same brand 
and class or type, was made by the same producer, was subjected to the 
same cellar treatment, and conforms to the statements made on the 
certification.
    (2) Alternative certifications and exemptions--(i) The following 
are alternatives to the producing country certification and laboratory 
analysis requirement described in paragraph (b)(1) of this section:
    (A) In the case of natural wine produced and imported subject to an 
international agreement or treaty specifying that the practices and 
procedures used to produce the wine are acceptable to the United 
States, no producing country certification and laboratory analysis is 
required, unless that international agreement or treaty requires a 
certification, in which case the importer must have in his or her 
possession at the time of release of the wine from customs custody an 
original or copy of that certification.
    (B) If an importer of natural wine or its affiliate owns or 
controls a winery operating under a basic permit issued under part 1 of 
this chapter, in lieu of a producing country certification and 
laboratory analysis, the importer may

[[Page 49484]]

self-certify that the practices and procedures used to produce the wine 
constitute proper cellar treatment. The self-certification must be 
either in the format set forth in paragraph (c) of this section with 
blocks 1 through 4 completed or in an alternative format that sets 
forth the same information, and it must be in the possession of the 
importer at the time of release of the wine from customs custody. In 
the case of self-certification the importer also must have at the time 
of release from customs custody records to establish that the 
requirements for self-certification are met.
    (ii) The following are exempt from any certification requirement 
under this section:
    (A) Natural wine produced before January 1, 2005. However, in this 
case, the importer must have in his or her possession at the time of 
release of the wine from customs custody records to establish that the 
wine was produced before January 1, 2005.
    (B) Importations of natural wine that are of a personal, non-
commercial nature. Examples of non-commercial importations include 
importations by travelers, gift shipments between individuals, and 
importations by diplomats for embassy or consular use.
    (C) Importations of natural wine that constitute commercial 
samples. Commercial samples include sales samples, samples for trade 
shows, and samples for laboratory analysis.
    (D) Imported natural wine held on board international passenger 
carriers, such as cruise ships or airliners.
    (c) Form. The format for certification referred to in paragraph (b) 
of this section is the following:
BILLING CODE 4810-31-P

[[Page 49485]]

[GRAPHIC] [TIFF OMITTED] TR24AU05.000

BILLING CODE 4810-31-C

[[Page 49486]]

    (d) Preparation of Certification. The following rules apply for the 
completion of the certification set forth in paragraph (c) of this 
section:
    (1) Block 1 must state the legal name and address (including 
country) of the producer of the wine.
    (2) Block 2 must include a complete description of the wine, 
including its brand name, year of production, class or type, and 
country of origin.
    (3) The importer must check the applicable box in block 3:
    (i) The importer must check box 3a and ensure that blocks 4 and 5 
are completed if no alternative certification applies to the wine under 
paragraph (b)(2)(i) of this section.
    (ii) If paragraph (b)(2)(i)(B) applies to the wine, the importer 
must check box 3b and complete the certification in block 4.
    (4) If the certification is submitted subsequent to approval of a 
label, the importer must complete block 6 by including the TTB 
identification number from the certificate of label approval, TTB Form 
5100.31.

    Signed: August 4, 2005.
John J. Manfreda,
Administrator.
    Approved: August 4, 2005.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 05-16772 Filed 8-23-05; 8:45 am]
BILLING CODE 4810-31-U