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contains regulatory documents having general

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Rules and Regulations Federal Register

49479

Vol. 70, No. 163

Wednesday, August 24, 2005

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 Comite

 ́

Europe

 ́

en des 

Entreprises Vins; the Distilled Spirits 

Council of the United States; the 

Fe

 ́

de

 ́

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 

49480 Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Rules and Regulations 

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 § 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 §§ 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 

§ 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. 

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

• 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. 

• 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 § 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 quasigovernmental 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 quasigovernmental 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 governmentapproved 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 

49482 Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Rules and Regulations 

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 § 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 post2004 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 § 4.45 and § 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 forprofit institutions, including 

partnership, associations, and 

corporations. 

• Estimated total annual reporting 

and/or recordkeeping burden: 6,600 

hours. 

• Estimated average annual burden 

per respondent/recordkeeper: 1.65 

hours. 

• Estimated number of respondents 

and/or recordkeeping: 4,000. 

• 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

n 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

n 1. The authority citation for part 4 

continues to read as follows:

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

noted.

n 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:

§ 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 

Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Rules and Regulations 49483

comply with other conditions 

prescribed in § 27.140 of this chapter 

regarding proper cellar treatment. If 

imported wine requires a certification 

under § 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 § 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 § 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

n 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.

n 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:

§ 24.301 Bulk still wine record.

* * * * *

(k) If the proprietor is an importer of 

wine to which the provisions of § 27.140 

of this chapter apply, any certification 

or other records required at the time of 

release from customs custody under that 

section.

n 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:

§ 24.302 Effervescent wine record.

* * * * *

(j) If the proprietor is an importer of 

wine to which the provisions of § 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

n 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.

n 7. Subpart I, Importer’s Records and 

Reports, is amended by adding a new 

§ 27.140 to read as follows:

§ 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 § 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 

49484 Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Rules and Regulations 

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 selfcertification 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

Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Rules and Regulations 49485

BILLING CODE 4810–31–C


ER24AU05.000</GPH>
49486 Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Rules and Regulations 

(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

DEPARTMENT OF DEFENSE

Department of the Army 

32 CFR Part 505

[Army Regulation 340–21] 

Privacy Act; Implementation

AGENCY: Department of the Army, DoD.

ACTION: Final rule.

SUMMARY: The Department of the Army 

is exempting those records contained in 

A0195–2c USACIDC DoD, entitled ‘‘DoD 

Criminal Investigation Task Force 

(CITF) Files’’ when the records are 

compiled in furtherance of activities 

pertaining to the enforcement of 

criminal laws.

DATES: Effective August 24, 2005.

FOR FURTHER INFORMATION CONTACT: Ms. 

Janice Thornton at (703) 428–6503.

SUPPLEMENTARY INFORMATION: The 

proposed rule was published on 

February 25, 2005, at 70 FR 9261–9262. 

One public comment was received 

which has prompted a change in the 

final rule. The rule, as changed, is being 

adopted as final. 

The commenter expressed two 

principal concerns. First, the 

commenter observes that the 

Department is attempting to establish a 

new exemption, a prerogative that only 

Congress possesses. We disagree. As 

provided by law, the Department may 

promulgate a rule exempting a system of 

records from provisions of the Act if the 

system of records is maintained by a 

Component of the Agency that performs 

as its principal function the 

enforcement of criminal laws. Because 

the principal function of the DoD 

Criminal Investigation Task Force is law 

enforcement (i.e., criminal 

investigations into acts of terrorism and 

war crimes), the Department is 

authorized to adopt an exemption rule 

that will serve to preserve the integrity 

of the investigative process. And 

second, the commenter observes that 

adoption of the exemption will enable 

the Department to shield documents 

that heretofore were available to the 

public, thereby potentially resulting in 

the denial of access to individuals who, 

for example, are innocent members of 

the Armed Forces or individuals who 

have witnessed an act of terrorism or 

war crime. We disagree that the rule 

will deny access to all documents. As 

provided by law, the rule provides a 

basis for the Department to exempt 

certain records from the access 

provisions of the Act. It does not act to 

suspend any rights the individual 

otherwise may be entitled to under the 

law. Moreover, to the extent the 

documents may be disclosed without 

prejudicing the investigative process, 

the rule does not bar release. To 

eliminate any potential ambiguity that 

may exist regarding release of 

nonexempt documents from the system 

of records, the rule has been revised to 

make clear that only those records, the 

disclosure of which would have a 

deleterious impact on the investigative 

process, are shielded by the rule. 

Executive Order 12866, ‘‘Regulatory 

Planning and Review’’

It has been determined that Privacy 

Act rules for the Department of Defense 

are not significant rules. The rules do 

not (1) Have an annual effect on the 

economy of $100 million or more or 

adversely affect in a material way the 

economy; a sector of the economy; 

productivity; competition; jobs; the 

environment; public health or safety; or 

State, local, or tribal governments or 

communities; (2) Create a serious 

inconsistency or otherwise interfere 

with an action taken or planned by 

another Agency; (3) Materially alter the 

budgetary impact of entitlements, 

grants, user fees, or loan programs, or 

the rights and obligations of recipients 

thereof; or (4) Raise novel legal or policy 

issues arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in this Executive order.

Public Law 96–354, ‘‘Regulatory 

Flexibility Act’’ (5 U.S.C. Chapter 6) 

It has been certified that Privacy Act 

rules for the Department of Defense do 

not have significant economic impact on 

a substantial number of small entities 

because they are concerned only with 

the administration of Privacy Act 

systems of records within the 

Department of Defense. 

Public Law 96–511, ‘‘Paperwork 

Reduction Act’’ (44 U.S.C. Chapter 35) 

It has been certified that Privacy Act 

rules for the Department of Defense 

impose no information requirements 

beyond the Department of Defense and 

that the information collected within 

the Department of Defense is necessary 

and consistent with 5 U.S.C. 552a, 

known as the Privacy Act of 1974. 

Section 202, Public Law 104–4, 

‘‘Unfunded Mandates Reform Act’’

It has been certified that the Privacy 

Act rulemaking for the Department of 

Defense does not involve a Federal 

mandate that may result in the 

expenditure by State, local and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

and that such rulemaking will not 

significantly or uniquely affect small 

governments. 

Executive Order 13132, ‘‘Federalism’’

It has been certified that the Privacy 

Act rules for the Department of Defense 

do not have federalism implications. 

The rules do not have substantial direct 

effects on the States, on the relationship 

between the National Government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.

Dated: August 18, 2005. 

Jeannette Owings-Ballard, 

OSD Federal Register Liaison Officer, 

Department of Defense.

List of Subjects in 32 CFR Part 505

Privacy.

n Accordingly, 32 CFR part 505 is to be 

amended to read as follows:

PART 505—ARMY PRIVACY ACT 

PROGRAM

n 1. The authority citation for 32 CFR 

part 505 continues to read as follows: