November 9, 2009
Greetings! We hope you are having a prosperous and commendable week! This edition includes a report on a TTB International Trade Division seminar, a follow-up article from last week on the certification of Brunello di Montalcino, and guidelines concerning Treasury securities.
In the TTB Newsletter, we compile the top TTB news of the week and other helpful information about the Bureau and the Federal alcohol and tobacco laws and regulations we enforce. Please send any questions and/or comments to Executive Liaison for Industry Matters (IndustryLiaison@ttb.gov) and/or (StateLiaison@ttb.gov).
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TTB HOLDS INTERAGENCY SEMINAR ON EXPORTING WINE
On October 27, 2009, TTB's International Trade Division (ITD) hosted a seminar focusing on the exportation of wine by small wineries. ITD worked with representatives from five other Federal agencies to develop an agenda which covered:
- How to find customers;
- Federal \Export programs and resources;
- How to finance exportation;
- How trade negotiations affect wine; and
- How to export wine in compliance with TTB regulations.
The seminar, which was held at the Treasury Executive Institute in Washington, D.C., was attended by state trade association representatives from Washington, Oregon, Iowa, New York, Maryland, and Virginia.
TTB CONTINUES REQUIREMENT FOR CERTIFICATION OF BRUNELLO di MONTALCINO
On October 20, 2009, John Manfreda met with Luca Zaia, Italian Minister of Agriculture and with Giulio Terzi di Sant'Agata, Italy's Ambassador to the United States. The Government of Italy requested the meeting to discuss the ongoing investigations into the improper blending of several Italian wines including Brunello di Montalcino. Minister Zaia reassured TTB that his office has taken full responsibility for the integrity of all 500 Italian wine denominations and has ensured that none of the mislabeled products that have been the subject of numerous press reports for months now are on the market. He stressed that he has taken TTB concerns about the integrity of certain Italian wines seriously and consequently mandated a heightened quality control and oversight role for the Ministry of Agriculture. Minister Zaia also advised that the court case would be concluding soon and that TTB would be provided with information on the final disposition of the cases as soon as possible. Contrary to numerous reports indicating that TTB will no longer require the Italian government certification for imports of Brunello di Montalcino, TTB, at the meeting with the Italian government representatives, emphasized the need to receive the prosecutors report as soon as it is available to assist in determining the future need for and scope of the certification process. At this time, TTB continues to enforce the certification requirement and has no plans to lift this requirement.
SECURING AND SUCCESSFULLY TRANSFERRING TREASURY SECURITIES IN LIEU OF CORPORATE SURETY BOND
For Use Only When Choosing to Use a T-Note for Bond Collateral
Step 1
Purchase a Treasury note, or other acceptable security, from a local bank or brokerage firm. Inform the Bank/Broker of your purpose for buying the securities and the pending transfer to an Alcohol and Tobacco Tax and Trade Bureau (TTB) Circular 154 Safekeeping Account at the St. Louis Federal Reserve Bank (FRB).
The security/collateral you purchase MUST NOT REMAIN with your Bank/Broker. You are responsible for ensuring that the Bank/Broker you choose has the ability to transfer the security/collateral to the St. Louis FRB. We will not approve your bond until your security/collateral is on deposit in the Circular 154 Safekeeping Account at the St. Louis FRB.
Note: You cannot use a security purchased through Treasury Direct as collateral security because it cannot be transferred into the Federal Reserve Bank holding account.
Step 2
Once you purchase the securities, you must provide TTB with the following:
- The bank/broker's name and complete address (location where the securities are held)
- The bank/broker's contact person's name and phone number
- The bank's American Banking Association (ABA) Number (also called a Routing number)
- The bank/broker's account number
- Your Employer Identification Number
- Proof of purchase such as a transcript or excerpt of the transaction printout providing:
- Security amount
- CUSIP number
- Maturity date (at least two years in the future)
- Interest rate
Step 3
To receive the interest income from the securities, the T-note owner must designate a bank for direct deposit. You must provide the following information to TTB at the same time as the information in Step 2:
- The bank's name and complete address (where the interest income will be deposited)
- The bank's contact person's name and phone number
- The bank ABA/Routing number
- The account name and account number
- The account type (checking or savings)
Step 4
Once we receive this information, TTB's National Revenue Center (NRC) will ask the Federal Reserve Bank to set up an account for the applicant. This will allow the FRB to accept the securities as collateral for the applicant and place it in the Circular 154 Safekeeping account listing TTB as pledgee.
Step 5
TTB will contact you when the account is set up (about two weeks). You should then notify the bank or broker (listed in step 2) to transfer the securities into that account.
Step 6
The National Revenue Center will provide the proper bond forms and attachments for your specific situation. You must submit the completed bonds with the appropriate power of attorney and other attachments to TTB.
Step 7
When the FRB receives the securities, they will send NRC a receipt describing the securities and verifying that the securities are on deposit in a Circular 154 Account. We cannot approve the bond until we receive this receipt.
Step 8
The T-note will automatically ‘roll over' at maturity unless TTB is notified at least 45 days prior to maturity that the security is to be released. The T-note proceeds cannot be released until a superseding bond has been approved or the company has filed and been approved to discontinue operations.
Please contact the National Revenue Center at (877) 882-3277 or ttbquestions@ttb.gov if you have any questions.