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DEPARTMENT OF THE TREASURY
Bureau of Alcohol, Tobacco and Firearms
Washington, DC 20226

Industry Circular

Number: 2000-2
Date: July 6, 2000

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Exportation of Distilled Spirits, Wine, Beer and Tobacco Products Without Payment of Tax

To: All Proprietors of Distilled Spirits Plants, Bonded Wine Premises, Breweries, Tobacco Manufacturers and Export Warehouses

What is the purpose of this circular?

We are issuing this circular to clarify our position on:

  • Non-Vessel Operating Common Carriers (NVOCCs);

  • in-transit stops of untaxpaid alcohol beverages (distilled spirits, wine, or beer) or tobacco products you remove for export;

  • the types of export shipments allowable without payment of tax; and

  • the kinds of documentation that we consider to be acceptable proof of export for each type of shipment.

How do these issues apply to me?

In recent years, there have been changes in the shipping and transportation arrangements you use for untaxpaid alcohol beverages or tobacco products you remove from bonded premises for export from the United States. The changes include:

  • use of a new entity, an NVOCC, to facilitate export shipments and

  • the practice of temporarily storing or consolidating shipments at unbonded facilities prior to loading on the export carrier.

These activities raise questions about the acceptability of NVOCC bills of lading and the legality of in-transit stops of untaxpaid alcohol beverages or tobacco products removed for export. We discuss these issues and others in this circular.

What is ATF’s position on NVOCCs?

The Federal Maritime Commission is responsible for regulating maritime carriers. NVOCCs are bonded with the Commission, which created that term to distinguish them from Vessel Operating Common Carriers (VOCCs).

NVOCCs:

  • do not operate vessels;

  • contract with VOCCs to carry their export goods; and

  • issue export bills of lading covering the goods they export in this way.

We will now accept an NVOCC export bill of lading as an acceptable proof of export provided it contains all of the information required by ATF regulations in Title 27, Code of Federal Regulations, Parts 252 or 290.

What is ATF’s position on freight forwarders?

An NVOCC is distinguished from a freight forwarder. Freight forwarders:

  • facilitate shipments on behalf of a common carrier,

  • may arrange for warehouse storage of the export goods, and

  • unlike NVOCCs, are in a fiduciary relationship with the shipper.

Freight forwarders act as agents and handle funds in trust for their shippers or principals. A freight bill or any other type of documentation issued by a freight forwarder is not acceptable as proof of export.

What is ATF’s position for in-transit stops of untaxpaid shipments?

The laws covering the exportation of untaxpaid alcohol beverages or tobacco products do not provide for any stops of such products at unbonded facilities prior to being laden on the export carrier. This applies whether the stop is for:

  • consolidation with other shipments or

  • temporary storage pending exportation.

For such in-transit stops to be acceptable under the law, you must taxpay the alcohol beverages or tobacco products prior to removal from your bonded premises.

You may make in-transit stops of untaxpaid alcohol beverages or tobacco products you withdraw for exportation only on these bonded premises:

  • distilled spirits plant (spirits only)

  • bonded wine premises (wine only)

  • brewery premises (beer only)

  • tobacco manufacturer’s premises or export warehouse (tobacco products only)

  • Customs bonded warehouse (alcohol beverages only—tobacco products may go only to a class 9 CBW—duty free shop);

  • foreign trade zone (FTZ); or

  • the port of exportation under Customs’ supervision.

These restrictions also apply to shipments handled by NVOCCs. If you are an NVOCC and you want to store untaxpaid products at your warehouse pending exportation, you must first qualify under internal revenue bond:

  • for alcohol beverages: as a Customs bonded warehouse with the United States Customs Service or a foreign trade zone operator; or

  • for tobacco products: as an Export warehouse with ATF or as a foreign trade zone operator.

What types of export shipments does the law authorize?

Without payment of tax you may remove from your bonded premises alcohol beverage or tobacco products for these purposes.

    1. Export to a contiguous foreign country (Canada or Mexico).
    2. Export to a non-contiguous foreign country or transfer to Puerto Rico and the Virgin Islands.
    3. Use on certain vessels and aircraft. For more details: for alcohol beverages see 27 CFR 252.21; for tobacco products see 27 CFR 290.62.
    4. Transfer to and deposit in a foreign trade zone (FTZ).
    5. Transfer to and deposit in a Customs bonded warehouse (CBW) of alcohol beverages. You may transfer all tobacco products through a class 9 CBW (duty-free shop)
    6. Transportation to and deposit in a Customs manufacturing bonded warehouse (CMBW) (alcohol beverages only).
    7. Deposit of tobacco products in an export warehouse for shipment to a foreign country, Puerto Rico, the Virgin Islands, or other possessions of the United States, or for consumption outside the jurisdiction of the United States.
    8. Use by the armed forces of the United States. You may transfer tobacco products to other Federal departments and agencies solely for official use.

What is an acceptable proof of export?

  • An acceptable proof of export must be complete and accurate. We will not accept incomplete or inaccurate documentation.

  • Documents must be of verifiable and arms-length transactions—we do not accept "proof" from subsidiaries. For example, a certificate of receipt from your foreign subsidiary is not acceptable.

  • Documents must be credible. Proofs of export are documents necessarily created in the ordinary course of business at the time of the transaction.

  • You are responsible for the actions of your agents, including brokers, shipping agents and truckers. When they act on your behalf, their signatures become your signatures for purposes of proof of export.

  • In some cases we may require that you provide additional information or documentation to support your proof of export.

1. What is acceptable to prove an export to contiguous foreign countries?

Any one of these is acceptable for proof of export to Canada or Mexico.

  • For alcohol beverages and tobacco products: a signed export bill of lading containing the information required by 27 CFR 252.250.

  • For alcohol beverages and tobacco product shipments by rail: a signed railway express receipt containing the information required for an export bill of lading by 27 CFR 252.250.

  • For spirits and wine, ATF Form 5100.11 certified by Customs in parts V, VI, and VII.

  • For beer, ATF Form 1689 (5130.12) certified by Customs in parts II, III and IV.

  • For tobacco products:

    • ATF Form 2149/2150 (5200.14) certified by Customs in parts II or III.

    • If the shipment is by parcel post, ATF Form 2149/2150 (5200.14) certified in part VI by the postmaster or an authorized postal agent.

    • If the export is by an individual, please see ATF Industry Circular 81-1 for the procedure. You must certify ATF Form 2149/2150 (5200.14) in parts II and IV.

  • You may use these documents for alcohol beverages or tobacco if they contain sufficient information to identify the shipment and the ATF export document covering the shipment. We may request additional documentation to support these proofs of export.

    • A landing certificate from an official of Canada or Mexico certifying receipt of the shipment.

    • A statement under penalties of perjury from the carrier who took the shipment into Canada or Mexico.

    • A statement from the foreign customer certifying receipt of the shipment.

2. What is acceptable to prove an export to non-contiguous foreign countries?

Any one of these is acceptable to prove export to a non-contiguous foreign country. You may also use these documents to prove a transfer to United States possessions, including Puerto Rico and the Virgin Islands.

  • For alcohol beverages and tobacco products: a signed export bill of lading containing the information required by 27 CFR 252.250.

  • For alcohol beverages and tobacco products through shipment by air: a signed airway bill containing the information required by 27 CFR 252.250. (Do not confuse shipments made by air with shipments for use as supplies. Please see paragraphs 3 and 4 for this type of shipment.)

  • If a shipment of tobacco products goes by parcel post an ATF Form 2149/2150 (5200.14) certified by postal authorities as provided in 27 CFR 290.208.

  • For alcohol beverages and tobacco products: a certificate from the export carrier executed under the penalties of perjury and containing the information required by 27 CFR 252.253.

  • A certificate of receipt from an official of the foreign country. This must contain sufficient information to identify the shipment and the ATF export document covering the shipment.

  • For spirits and wine, ATF Form 5100.11 certified by Customs in parts V and VII.

  • For beer, ATF Form 1689 (5130.12) certified by Customs in parts II and IV.

  • For tobacco products, ATF Form 2149/2150 (5200.14) certified by Customs in parts III and IV.

3. What is acceptable to prove an export for use as supplies on certain vessels and     aircraft?

Any one of these is acceptable to prove export for use as supplies on vessels and aircraft.

  • For alcohol beverages and tobacco products: a certificate of receipt executed under the penalties of perjury by the master of the vessel, steamship line or aircraft, as the case may be, and containing the information required by 27 CFR 252.268.

  • For spirits and wine, ATF Form 5100.11 certified by Customs in parts V and VII.

  • For beer, ATF Form 1689 (5130.12) certified by Customs in part II. In the case of beer used on fishing vessels, Customs must certify parts II and IV.

  • For tobacco products, ATF Form 2149/2150 (5200.14) certified by Customs in part IV.

4. What is the difference between alcohol beverage exports by aircraft and for use as supplies for aircraft?

Alcohol beverages for use as supplies are entered into Customs custody at the airport. Airlines then make withdrawals as needed to meet demand on international flights. When the airlines have used all the alcohol beverages covered by a particular ATF export form, the Customs officer at the airport certifies that form. However, when the alcohol beverages are shipped by air, the entire shipment is laden on board the aircraft at the time of export, and the Customs officer can certify the applicable form at that time.

5. What is acceptable to prove a transfer to and deposit in a foreign trade zone (FTZ)?

The FTZ operator must complete all the applicable information and sign the appropriate form for the export product:

  • For spirits and wine: ATF Form 5100.11 part V.

  • For beer: ATF Form 1689 (5130.12) part II.

  • For tobacco products: ATF Form 2149/2150 (5200.14) part V.

6. What is acceptable to prove a transfer to and deposit in a customs bonded warehouse  (CBW) or a customs manufacturing bonded warehouse (CMBW)?

Prior to making any shipments of this type, you must verify the warehouse is properly qualified with the United States Customs Service. The CBW or CMBW operator must complete all applicable information and sign the appropriate form for the export product:

  • For spirits and wine: ATF Form 5100.11 part V.

  • For beer: ATF Form 1689 (5130.12) part II (modify Item 12 G to show CBW instead of FTZ).

  • For tobacco products, through a class 9 CBW (duty free store): ATF Form 2149/2150 (5200.14) part V.

  • You may not export tobacco products through other Customs bonded warehouses.

7. What is acceptable to prove an export from an export warehouse?

Prior to making any shipments of this type, you must verify the warehouse is properly qualified as an export warehouse (EW). The EW operator must complete all applicable information and must sign ATF Form 2149/2150 (5200.14) in part V. You may not export alcohol beverages through export warehouses.

8. What is acceptable to prove an export for use by the armed forces?

You may deliver your alcohol beverages or tobacco products to a military base in the United States prior to being shipped to a base in a foreign country. The commanding, supply or receiving officer or other responsible military personnel at the military base where you deliver the shipment must complete and sign the appropriate form for the product you export.

  • For spirits and wine: ATF Form 5100.11 part VIII.

  • For beer: ATF Form 1689 (5130.12) part V.

  • For tobacco products: ATF Form 2149/2150 (5200.14) part IV.

Alternatively, the responsible military personnel may acknowledge receipt for export on the Department of Defense Form, Transportation Control and Movement Document (TCMD). If you use a TCMD as proof of export, the military personnel must legibly provide this information: date, discrepancy from bill of lading or shipping document, rank, title, and signature

If the place of delivery is in a foreign country, handle the shipment as an export to a foreign country and use any of the documents listed in paragraphs 1 or 2, as applicable, to prove export.

Regardless of the location of the place of delivery, all alcohol beverages or tobacco products you remove on Forms 5100.11, 1689 (5130.12), or 2149/2150 (5200.14) for transfer to the armed forces must be used by the military outside of the United States.

You may ship tobacco products to other Federal departments or agencies for their official use. These instructions also apply to these shipments.

How am I required to prepare the ATF export forms?

You must follow the instructions on the forms to accurately prepare and distribute ATF Forms 5100.11, 1689 (5130.12), or 2149/2150 (5200.14).

  • Give special attention to the purpose of the export and to the consignee: items 6 and 7 on Form 5100.11; items 5 and 6 on Form 1689 (5130.12); and items 10 and 11 on Form 2149/2150 (5200.14). Check only one block in the purpose of export.

  • All information you list must agree with the information on the proof of export you submit with the forms.

What other information is useful for me to know?

We are reviewing export regulations and procedures with the intent to modernize and automate them as much as possible. We plan within the next few months to publish in the Federal Register a notice of proposed rulemaking. Until any changes are effective, you must comply with the current regulations and with the instructions in this circular and others we issued to address export requirements. We invite you to comment on the notice.

Will ATF accept any other evidence of export?

If you, as a proprietor of an exporting distilled spirits plant, winery, brewery, tobacco manufacturer or export warehouse, have made every effort, but remain unable to obtain any of the documentation discussed in this circular, we may consider other evidence to be acceptable. Before we accept an alternative proof of export, you must request an alternative method under the provisions of 27 CFR §§ 252.20 or 290.72. We may request that you provide an example of the documentation that you propose to provide to prove export. We may or may not accept your proposed alternative. Failure to submit satisfactory proof of export may subject you to liability for the excise tax plus interest.

Does ATF inspect the export documentation I maintain at my premises?

If you have a current ATF approval to maintain all export documentation at your premises, we check this documentation on a random sampling basis. We verify the accuracy and acceptability of these documents with inspectors during field inspections or with specialists in the National Revenue Center, as appropriate. If we determine that your documentation is inadequate, you may be subject to liability for the excise tax plus interest.

Also, we remind you that the law subjects those who submit fraudulent export documents to civil and criminal penalties under the Internal Revenue Code. You may find more detailed information about this in:

  • Industry Circular 95-1, Diversion of Distilled Spirits For Purposes of Smuggling; and
  • Industry Circular 99-2, Unlawful Transportation, Shipment, or Sale of Cigarettes and Domestic Sale of Cigarettes Labeled for Export

Where can I get more information?

You may request more information about this circular. Please refer to this circular number and address your inquiry to:

Chief, National Revenue Center
8002 Federal Office Building
550 Main Street
Cincinnati, Ohio 45202

Bradley A. Buckles
Bradley A. Buckles
Director
 
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