1513-0010 Laws and Regs.

-11-

1513-0010

26 U.S.C.

Sec. 5362. Removals of wine from bonded wine cellars

(a) Withdrawals on determination of tax

Wine may be withdrawn from bonded wine cellars on payment or

determination of the tax thereon, under such regulations as the

Secretary shall prescribe.

(b) Transfers of wine between bonded premises

(1) In general

Wine on which the tax has not been paid or determined may, under

such regulations as the Secretary shall prescribe, be transferred in

bond between bonded premises.

(2) Wine transferred to a distilled spirits plant may not be

removed for consumption or sale as wine

Any wine transferred to the bonded premises of a distilled

spirits plant--

(A) may be used in the manufacture of a distilled spirits

product, and

(B) may not be removed from such bonded premises for

consumption or sale as wine.

(3) Continued liability for tax

The liability for tax on wine transferred to the bonded premises

of a distilled spirits plant pursuant to paragraph (1) shall (except

as otherwise provided by law) continue until the wine is used in a

distilled spirits product.

(4) Transfer in bond not treated as removal for consumption

or sale

For purposes of this chapter, the removal of wine for transfer

in bond between bonded premises shall not be treated as a removal for

consumption or sale.

(5) Bonded premises

For purposes of this subsection, the term ``bonded premises''

means a bonded wine cellar or the bonded premises of a distilled

spirits plant.

(c) Withdrawals of wine free of tax or without payment of tax

Wine on which the tax has not been paid or determined may, under

such regulations and bonds as the Secretary may deem necessary to

protect the revenue, be withdrawn from bonded wine cellars--

(1) without payment of tax for export by the proprietor or by

any authorized exporter;

(2) without payment of tax for transfer to any foreign-trade

zone;

(3) without payment of tax for use of certain vessels and

aircraft as authorized by law;

(4) without payment of tax for transfer to any customs bonded

warehouse;

(5) without payment of tax for use in the production of vinegar;

(6) without payment of tax for use in distillation in any

distilled spirits plant authorized to produce distilled spirits;

(7) free of tax for experimental or research purposes by any

scientific university, college of learning, or institution of

scientific research;

(8) free of tax for use by or for the account of the proprietor

or his agents for analysis or testing, organoleptic or otherwise;

and

(9) free of tax for use by the United States or any agency

thereof, and for use for analysis, testing, research, or

experimentation by the governments of the several States and the

District of Columbia or of any political subdivision thereof or by

any agency of such governments. No bond shall be required of any

such government or agency under this paragraph.

(d) Withdrawal free of tax of wine and wine products unfit for beverage

use

Under such regulations as the Secretary may deem necessary to

protect the revenue, wine, or wine products made from wine, when

rendered unfit for beverage use, on which the tax has not been paid or

determined, may be withdrawn from bonded wine cellars free of tax. The

wine or wine products to be so withdrawn may be treated with methods or

materials which render such wine or wine products suitable for their

intended use. No wine or wine products so withdrawn shall contain more

than 21 percent of alcohol by volume, or be used in the compounding of

distilled spirits or wine for beverage use or in the manufacture of any

product intended to be used in such compounding.

(e) Withdrawal from customs bonded warehouses for use of foreign

embassies, legations, etc.

(1) In general

Notwithstanding any other provision of law, wine entered into

customs bonded warehouses under subsection (c)(4) may, under such

regulations as the Secretary may prescribe, be withdrawn from such

warehouses for consumption in the United States by and for the

official or family use of such foreign governments, organizations,

and individuals who are entitled to withdraw imported wines from

such warehouses free of tax. Wines transferred to customs bonded

warehouses under subsection (c)(4) shall be entered, stored, and

accounted for in such warehouses under such regulations and bonds as

the Secretary may prescribe, and may be withdrawn therefrom by such

governments, organizations, and individuals free of tax under the

same conditions and procedures as imported wines.

(2) Withdrawal for domestic use

Wine entered into customs bonded warehouses under subsection

(c)(4) for purposes of removal under paragraph (1) may be withdrawn

therefrom for domestic use. Wines so withdrawn shall be treated as

American goods exported and returned.

(3) Sale or unauthorized use prohibited

Wine withdrawn from customs bonded warehouses or otherwise

brought into the United States free of tax for the official or

family use of foreign governments, organizations, or individuals

authorized to obtain wine free of tax shall not be sold and shall

not be disposed of or possessed for any use other than an authorized

use. The provisions of paragraphs (1)(B) and (3) of section 5043(a)

are hereby extended and made applicable to any person selling,

disposing of, or possessing any wine in violation of the preceding

sentence, and to the wine involved in any such violation.

(Added Pub. L. 85-859, title II, Sec. 201, Sept. 2, 1958, 72 Stat. 1380;

amended Pub. L. 90-73, Sec. 1(a), Aug. 29, 1967, 81 Stat. 175; Pub. L.

94-455, title XIX, Secs. 1905(c)(4), 1906(b)(13)(A), Oct. 4, 1976,

90 Stat. 1823, 1834; Pub. L. 96-39, title VIII, Sec. 807(a)(44), July

26, 1979, 93 Stat. 287; Pub. L. 96-601, Sec. 2(a), (b), Dec. 24, 1980,

94 Stat. 3495.)

Sec. 5386. - Special natural wines

(a) In general

Special natural wines are the products made, pursuant to a formula approved under this section, from a base of natural wine (including heavy-bodied blending wine) exclusively, with the addition, before, during or after fermentation, of natural herbs, spices, fruit juices, aromatics, essences, and other natural flavorings in such quantities or proportions as to enable such products to be distinguished from any natural wine not so treated, and with or without carbon dioxide naturally or artificially added, and with or without the addition, separately or in combination, of pure dry sugar or a solution of pure dry sugar and water, or caramel. No added wine spirits or alcohol or other spirits shall be used in any wine under this section except as may be contained in the natural wine (including heavy-bodied blending wine) used as a base or except as may be necessary in the production of approved essences or similar approved flavorings. The Brix degree of any solution of pure dry sugar and water used may be limited by regulations prescribed by the Secretary in accordance with good commercial practice.

(b) Cellar treatment

Special natural wines may be cellar treated under the provisions of section 5382(a) and (c)

27 U.S.C.

Sec. 205. - Unfair competition and unlawful practices

It shall be unlawful for any person engaged in business as a distiller, brewer, rectifier, blender, or other producer, or as an importer or wholesaler, of distilled spirits, wine, or malt beverages, or as a bottler, or warehouseman and bottler, of distilled spirits, directly or indirectly or through an affiliate:

(e) Labeling

To sell or ship or deliver for sale or shipment, or otherwise introduce in interstate or foreign commerce, or to receive therein, or to remove from customs custody for consumption, any distilled spirits, wine, or malt beverages in bottles, unless such products are bottled, packaged, and labeled in conformity with such regulations, to be prescribed by the Secretary of the Treasury, with respect to packaging, marking, branding, and labeling and size and fill of container

(1) as will prohibit deception of the consumer with respect to such products or the quantity thereof and as will prohibit, irrespective of falsity, such statements relating to age, manufacturing processes, analyses, guarantees, and scientific or irrelevant matters as the Secretary of the Treasury finds to be likely to mislead the consumer;

(2) as will provide the consumer with adequate information as to the identity and quality of the products, the alcoholic content thereof (except that statements of, or statements likely to be considered as statements of, alcoholic content of malt beverages are prohibited unless required by State law and except that, in case of wines, statements of alcoholic content shall be required only for wines containing more than 14 per centum of alcohol by volume), the net contents of the package, and the manufacturer or bottler or importer of the product;

(3) as will require an accurate statement, in the case of distilled spirits (other than cordials, liqueurs, and specialties) produced by blending or rectification, if neutral spirits have been used in the production thereof, informing the consumer of the percentage of neutral spirits so used and of the name of the commodity from which such neutral spirits have been distilled, or in case of neutral spirits or of gin produced by a process of continuous distillation, the name of the commodity from which distilled;

(4) as will prohibit statements on the label that are disparaging of a competitor's products or are false, misleading, obscene, or indecent; and

(5) as will prevent deception of the consumer by use of a trade or brand name that is the name of any living individual of public prominence, or existing private or public organization, or is a name that is in simulation or is an abbreviation thereof, and as will prevent the use of a graphic, pictorial, or emblematic representation of any such individual or organization, if the use of such name or representation is likely falsely to lead the consumer to believe that the product has been indorsed, made, or used by, or produced for, or under the supervision of, or in accordance with the specifications of, such individual or organization: Provided, That this clause shall not apply to the use of the name of any person engaged in business as a distiller, brewer, rectifier, blender, or other producer, or as an importer, wholesaler, retailer, bottler, or warehouseman, of distilled spirits, wine, or malt beverages, nor to the use by any person of a trade or brand name used by him or his predecessor in interest prior to August 29, 1935; including regulations requiring, at time of release from customs custody, certificates issued by foreign governments covering origin, age, and identity of imported products: Provided further, That nothing herein nor any decision, ruling, or regulation of any Department of the Government shall deny the right of any person to use any trade name or brand of foreign origin not presently effectively registered in the United States Patent and Trademark Office which has been used by such person or predecessors in the United States for a period of at least five years last past, if the use of such name or brand is qualified by the name of the locality in the United States in which the product is produced, and, in the case of the use of such name or brand on any label or in any advertisement, if such qualification is as conspicuous as such name or brand.

It shall be unlawful for any person to alter, mutilate, destroy, obliterate, or remove any mark, brand, or label upon distilled spirits, wine, or malt beverages held for sale in interstate or foreign commerce or after shipment therein, except as authorized by Federal law or except pursuant to regulations of the Secretary of the Treasury authorizing relabeling for purposes of compliance with the requirements of this subsection or of State law.

In order to prevent the sale or shipment or other introduction of distilled spirits, wine, or malt beverages in interstate or foreign commerce, if bottled, packaged, or labeled in violation of the requirements of this subsection,

(1) no bottler of distilled spirits, no producer, blender, or wholesaler of wine, or proprietor of a bonded wine storeroom, and no brewer or wholesaler of malt beverages shall bottle, and

(2) no person shall remove from customs custody, in bottles, for sale or any other commercial purpose, distilled spirits, wine, or malt beverages, respectively, after such date as the Secretary of the Treasury fixes as the earliest practicable date for the application of the provisions of this subsection to any class of such persons (but not later than August 15, 1936, in the case of distilled spirits, and December 15, 1936, in the case of wine and malt beverages, and only after thirty days' public notice), unless, upon application to the Secretary of the Treasury, he has obtained and has in his possession a certificate of label approval covering the distilled spirits, wine, or malt beverages, issued by the Secretary in such manner and form as he shall by regulations prescribe: Provided, That any such bottler of distilled spirits, or producer, blender, or wholesaler of wine, or proprietor of a bonded wine storeroom, or brewer or wholesaler of malt beverages shall be exempt from the requirements of this subsection if, upon application to the Secretary, he shows to the satisfaction of the Secretary that the distilled spirits, wine, or malt beverages to be bottled by the applicant are not to be sold, or offered for sale, or shipped or delivered for shipment, or otherwise introduced, in interstate or foreign commerce. Officers of internal revenue are authorized and directed to withhold the release of distilled spirits from the bottling plant unless such certificates have been obtained, or unless the application of the bottler for exemption has been granted by the Secretary; and customs officers are authorized and directed to withhold the release from customs custody of distilled spirits, wine, and malt beverages, unless such certificates have been obtained. The District Courts of the United States, and the United States court for any Territory shall have jurisdiction of suits to enjoin, annul, or suspend in whole or in part any final action by the Secretary upon any application under this subsection; or

27 CFR

Sec. 24.80 General.

The proprietor shall, before production, obtain approval of the

formula and process by which special natural wine, agricultural wine,

and other than standard wine (except distilling material or vinegar

stock) are to be made. The formula must be prepared and filed on TTB F

5120.29, Formula and Process for Wine, in accordance with the

instructions on the form. A nonbeverage wine formula will show the

intended use of the finished wine or wine product. Any formula approved

under this section will remain in effect until revoked, superseded, or

voluntarily surrendered. Except for research, development, and testing,

no special natural wine, agricultural wine, or, if required to be

covered by an approved formula, wine other than standard wine may be

produced prior to approval by the appropriate TTB officer of a formula

covering each ingredient and process (if the process requires approval)

used in the production of the product. (Sec. 201, Pub. L. 85-859, 72

Stat. 1380, as amended, 1381, as amended, 1386, as amended, 1395, as

amended (26 U.S.C. 5361, 5367, 5386, 5387, 5555))

(Approved by the Office of Management and Budget under control number

1513-0010)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409,

64 FR 13684, Mar. 22, 1999]

Sec. 24.81 Filing of formulas.

The proprietor shall on each formula filed designate all ingredients and, if required, describe each process used to produce the wine. The addition or elimination of ingredients, changes in quantities used, and changes in the process of production, or any other change in an approved formula, will require the filing of a new TTB F 5120.29. After a change in formula is approved, the original formula must be surrendered to the appropriate TTB officer. The proprietor shall serially number each formula, commencing with ``1'' and continuing thereafter in numerical sequence. Nonbeverage wine formulas will be prefixed with the symbol ``NB.'' The appropriate TTB officer may at any time require the proprietor to file a statement of process in addition to that required by the TTB F 5120.29 or any other data to determine whether the formula should be approved or the approval continued. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1395, as amended (26 U.S.C. 5367, 5555))

(Approved by the Office of Management and Budget under control number

1513-0010)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409,

64 FR 13684, Mar. 22, 1999]

Sec. 24.82 Samples.

Except for vinegar and salted wine as defined in Sec. 24.215, the

proprietor shall submit under separate cover at the time of filing any

nonbeverage wine formula a 750 mL sample of the base wine used and a 750 mL sample of the finished wine or wine product. The latter sample will be considered representative of the finished product. Any material

change in the flavor or other characteristics of the finished product

from that of the approved sample will require the filing of a new

formula even though the ingredients may be the same. In addition, the

appropriate TTB officer may, at any time, require the proprietor to

submit samples of any wine or wine product made in accordance with an

approved formula or of any materials used in production. (Sec. 201, Pub. L 85-859, 72 Stat. 1380, as amended (26 U.S.C. 5362))

(Approved by the Office of Management and Budget under control number

1513-0010)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312,

56 FR 31077, July 9, 1991; T.D. ATF-409, 64 FR 13684, Mar. 22, 1999]

Sec. 24.86 Essences produced on wine premises.

Wine, taxpaid spirits, or spirits withdrawn tax-free may be used in

the production of essences on wine premises. The description of the

process for producing the essence may be included as part of a formula

for the production of a formula wine or a separate formula may be filed

on TTB F5120.29. If a separate formula is filed for the essence, the

serial number of the formula by which it is produced will be shown in

the TTB F 5120.29 covering the formula wine in which it is to be used.

If an essence is to be made in quantities greater than required for

individual lots of formula wine, and stored on the premises, a separate

formula will be filed for the essence. Essences made on wine premises

with wine spirits withdrawn free of tax pursuant to 26 U.S.C. 5214(a)(5) may only be used in the production of a formula wine, and may not be removed from the premises where made. Essences made on wine premises with the use of tax-free spirits withdrawn free of tax pursuant to 26 U.S.C. 5214(a)(13) may only be used in the production of a nonbeverage wine or wine product and may not be removed from the premises where made. The TTB F 5120.29 for the production of an essence

is filed in the same manner as for the production of formula wine and a

sample of the essence produced will be at least four fluid ounces. (Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control number

1513-0010)

Sec. 24.87 Essences made elsewhere.

Before an essence not made on wine premises may be used in the

production of formula wine, the manufacturer of the essence shall obtain approval from the appropriate TTB officer. The request for approval will identify the essence by name or number and by the name of the manufacturer, and a sample of at least four fluid ounces of the essence will be submitted. However, a request for approval and submission of a sample is not required if the essence is made pursuant to approval of a formula on TTB F 5530.5, Formula and Process for Nonbeverage Product. Essences made under an approved formula on TTB F 5530.5 will be described on TTB F 5120.29 by showing the name of the manufacturer, the manufacturer's nonbeverage drawback formula number, and the date of approval by the appropriate TTB officer. (Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control number

1513-0010)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409,

64 FR 13683, Mar. 22, 1999]

Sec. 24.192 Process and materials.

In preparing still wine for the production of sparkling wine or

artificially carbonated wine, sugar and acid of the kinds and within the limitations prescribed in Sec. 24.182 may be added with yeast or yeast culture to acclimate the yeast and to facilitate the process of

secondary fermentation or to correct the wine. Fruit syrup, sugar, wine, wine spirits, and acid may be used in preparing a finishing dosage for sparkling wine or artificially carbonated wine provided the dosage does not exceed 10 percent by volume of the finished product. Where the proprietor desires to use more than 10 percent by volume finishing dosage, the proprietor shall file for a formula approval under Sec. 24.80. The fruit syrup, wine spirits and wine used will come from the same kind of fruit as the wine from which the sparkling wine or artificially carbonated wine is made. In the production of sparkling

wine or artificially carbonated wine, taxpaid wine spirits or wine

spirits withdrawn tax-free may be used. Tax-free wine spirits may only

be used in the production of sparkling wine or artificially carbonated

wine which is a natural wine. In the refermentation and finishing of a

sparkling wine, the acids and materials specifically authorized in Sec.

24.246 may be used. (Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended (26 U.S.C. 5382))

(Approved by the Office of Management and Budget under control number

1513-0010)

Sec. 24.195 General.

Special natural wine is a flavored wine made on bonded wine premises from a base of natural wine. The flavoring added may include natural herbs, spices, fruit juices, natural aromatics, natural essences or other natural flavoring, in quantities or proportions such that the resulting product derives character and flavor distinctive from the base wine and distinguishable from other natural wine. Fruit juices may not be used to give to one natural wine the flavor of another but may be used with herbs or spices to produce a wine having a distinctive flavor. Caramel and sugar may be used in a special natural wine. However, the minimum 60 degrees Brix limitations prescribed in the definition of ``Liquid pure sugar'' and ``Invert sugar syrup'' in Sec. 24.10 do not apply to materials used in the manufacture of vermouth. Finished vermouth will contain a minimum of 80 percent by volume natural wine. Heavy bodied blending wine and juice or concentrated fruit juice to which wine spirits have been added may be

used in the production of special natural wine pursuant to formula

approval. (Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended (26

U.S.C. 5386))

(Approved by the Office of Management and Budget under control number

1513-0010)

Sec. 24.196 Formula required.

Before producing any special natural wine, the proprietor shall

receive approval of the formula by which it is to be made as provided by Sec. 24.80. Any change in a formula will be approved in advance as

provided by Sec. 24.81. (Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as

amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control number

1513-0010)

Sec. 24.198 Blending.

Special natural wine may be blended with other special natural wine

of the same class and kind, and with heavy bodied blending wine, or

natural wine of the same kind of fruit, in the further production of

special natural wine. The blending of special natural wines produced

under different formulas requires the filing and approval of a formula

authorizing a blending; however, where two or more formulas have been

approved for the production of special natural wine of the same type,

e.g., producing a sweet vermouth by blending sweet vermouths produced

under two or more approved formulas, the submission and approval of an

additional formula is not required. (Sec. 201, Pub. L. 85-859, 72 Stat.

1386, as amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control number

1513-0010)

Sec. 24.201 Formula required.

Before producing any agricultural wine, the proprietor shall obtain

an approval of the formula and process by which it is to be made

pursuant to the provisions of Sec. 24.80. Any change in a formula will

be approved in advance as provided by Sec. 24.81. (Sec. 201, Pub. L.

85-859, 72 Stat. 1386, as amended (26 U.S.C. 5387))

(Approved by the Office of Management and Budget under control number

1513-0010)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409,

64 FR 13685, Mar. 22, 1999]

Sec. 24.211 Formula required.

The proprietor who desires to produce wine other than standard wine

shall first obtain approval of the formula by which it is to be made,

except that no formula is required for distilling material or vinegar

stock. The formula is filed as provided by Sec. 24.80. Any change in

the formula will be approved in advance as provided by Sec. 24.81.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1387, as amended (26 U.S.C. 5388))

(Approved by the Office of Management and Budget under control number

1513-0010)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409,

64 FR 13685, Mar. 22, 1999]

Sec. 24.214 Spanish type blending sherry.

Blending wine made with partially caramelized grape concentrate may

be produced, stored, and handled on, or transferred in bond between,

bonded wine premises, or removed upon payment of tax, not for sale or

consumption as beverage wine. Wine of a high solids content and dark in

color, produced under this section, is designated ``Spanish Type

Blending Sherry.'' Upon removal, the shipping containers will be marked

with the applicable designation and the legend ``Not for Sale or

Consumption as Beverage Wine.'' Spanish type blending sherry is not

standard wine and may not be blended with standard wine except pursuant

to an approved formula or in the further production of this type of

wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1381, as

amended, 1387, as amended (26 U.S.C. 5361, 5388))

(Approved by the Office of Management and Budget under control numbers

1513-0010 and 1513-0092)