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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau

Industry Circular

Number: 2012-03
Date: December 10, 2012

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Electronically Processing Paper Certificate of Label Approval (COLA) Applications

To: Proprietors of Bonded Wineries, Bonded Wine Cellars, Taxpaid Wine Bottling Houses, Beverage Distilled Spirits Plants, Breweries, Importers, and Others Concerned.

1. What is the purpose of this circular?

Beginning on or about February 1, 2013, the Alcohol and Tobacco Tax and Trade Bureau (TTB) will improve the way that we process paper certificate of label approval (COLA) applications and the way that we communicate with submitters regarding the final status of those applications. This circular is meant to notify the industry of this impending improvement and provide an overview of the benefits. These improvements will:

  • Allow industry members to move their products into the marketplace more quickly;
  • Reduce the administrative burden and the costs associated with paper COLA application submissions;
  • Expedite communication between submitters and TTB regarding paper COLAapplications; and
  • Promote a more efficient use of resources, while ensuring that products are appropriately labeled.

2. What authority over labeling does TTB have?

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), provides for the application for and issuance of COLAs for wine, distilled spirits, and malt beverages sold or shipped in interstate or foreign commerce and authorizes the Secretary of the Treasury to prescribe regulations for the labeling of such products. We administer the regulations promulgated under the FAA Act which are set forth in Title 27, Code of Federal Regulations (CFR), parts 4, 5, and 7 (27 CFR parts 4, 5, and 7). The FAA Act requires that these regulations, among other things, prohibit consumer deception and the use of misleading statements on labels, and ensure that labels provide the consumer with adequate information about the identity and quality of the product.

TTB receives applications from industry members either electronically, through the COLAs Online system, or in paper form on TTB F 5100.31, "Application for and Certification/Exemption of Label/Bottle Approval." Applications for certificates of exemption and distinctive liquor bottle approvals are also submitted on this form, and will be processed in the same way as COLA applications. Currently, over 90 percent of COLA applications are filed and processed electronically. However, TTB is seeking ways to improve the turnaround time for paper applications that are filed by mail or hand delivery.

3. Why is TTB changing the way it processes paper COLA applications?

As part of our ongoing effort to streamline our COLA evaluation process, we reviewed the existing paper COLA application procedure to determine if it could be more efficient. We found that significant time and resources are being spent on administrative functions associated with the paper COLA process.

Unlike the vast majority of COLA applications, which are received electronically and then processed electronically, COLA applications received in paper format are currently processed in paper format. Under the current procedure, once TTB completes its evaluation of a paper application we generally mail a copy of the application back to the industry member at the address listed on the form, or, if a third party representative personally delivered the application to TTB, we provide a copy of the application to the representative for personal pick-up. If the application is approved, TTB then scans the approved paper forms into electronic format so that the approved labels can be included in the Public COLA Registry. In order to improve our paper COLA application review process, we decided to streamline this administrative procedure by using a more efficient electronic process for COLA applications that are submitted in paper format.

4. What changes will TTB implement?

We will automate the way we track and evaluate paper COLA applications and improve the way we communicate with submitters. Once the system is implemented, TTB will scan the paper COLA applications after receipt and we will process all paper applications electronically. If the COLA application includes an email address, we will notify applicants whether or not we approved the COLA application by email, instead of through the paper processes of conventional mail or hand delivery.

After an application has been processed, the system will send an encrypted email to any applicant who provides an email address on the application. If the application is approved, the email will include a low resolution copy of the application and the information on where to access a high resolution image of the approved COLA. If the application is rejected, the email will include a high resolution copy of the application, a list of reasons why a rejection was issued, and the steps to follow in order to correct and resubmit the application. Once the application has been processed and verified by the system, the paper applications will be maintained electronically. Moreover, no paper copies will be mailed back to you if your COLA application contains an email address.

We anticipate that industry members who provide an email address on their applications will be notified of the final status within one business day of our determination. TTB encourages applicants to provide an email address on paper applications in order to get the full benefits of this new system. We are in the process of revising the instructions on the COLA form (TTB F 5100.31) to reflect the way that TTB will return applications under the new system. Please note that once TTB begins the electronic processing of paper applications, the new procedures will apply regardless of which version of the COLA form is submitted.

Upon implementation, electronically processed COLA applications will result in efficiencies to TTB and be less costly to American taxpayers. The application will travel through the system in one continuous effort, and notification about the final status will be delivered by email to the applicant within one business day. We anticipate that the improvements and the efficiency associated with this new enhancement will be noticeable to the industry within a few weeks.

5. When will TTB start this new process?

TTB plans to implement this process on or about February 1, 2013.

6. How do I ensure that I, or my representative, will receive email notifications about TTB action taken on my COLA application(s)?

In order to receive email notifications from TTB, you must provide an email address on each paper application you submit. If you provide an email address on just one application, but you submit multiple applications, then you will only receive an email notification regarding the application on which you provided an email address.

In order to provide secure email communication between TTB and submitters, these email messages will be encrypted. In order to access the encrypted emails you will need to register your email addresses. You will find instructions for how to register when you click the "open the message" link within the email. Once you register, you will need to log in each time you want to view the encrypted emails. Encrypted emails will expire on a specified date and time, which will be indicated in the email message. Even though the message will expire, this will not impact your COLA in any way.

TTB encrypted emails will come from the @ttb.gov domain. If you have security precautions set up in your email program, you should add the @ttb.gov domain to your list of safe senders.

Example Email: From: xxxxx@ttb.gov

<ttb.SecureEmailFrom_xxxx_bcafaibdfjffedahhg@zixmessagecenter.com> Date: Tue, May 8, 2012 at 9:59 AM

Subject: SUBJECT [ttbsecure] To: xxxxxxxxx.xxx

New ZixCorp secure email message from TTB Secure Email

Open Message

To view the secure message, click Open Message.

The secure message expires on May 22, 2012 @ 01:59 PM (GMT).

Do not reply to this notification message; this message was auto-generated by the sender's security system. To reply to the sender, click Open Message.

If clicking Open Message does not work, copy and paste the link below into your Internet browser address bar.

https://web1.zixmail.net/s/e?b=ttb&m=ABD3TQIu9d363wVTngRHXM9p&c=ABAtZdr3pX3
85yVERqaV3l4L&em=dullthursday%40gmail%2ecom

Want to send and receive your secure messages transparently?

Click here to learn more.

For more information about the encryption services see:

http://www.zixcorp.com/info/zixmail_ZMC

7. What information will TTB include in the email?

Emails for approved COLA applications will include:

  • An attachment containing a low resolution copy of the approved COLA;
  • A list of any qualifications that have been placed on the approved COLA; and
  • Instructions for where to access a high resolution (quality) image of your approved COLA.

We will continue to place a copy of the approved COLA in the Public COLA Registry. The approved COLA will be available on the Public COLA Registry within 10 days of the approval date.
Emails for rejected applications will include:

  • A list of the reasons that we rejected the application;
  • A list of instructions specifying how to correct and resubmit the application; and
  • An attachment containing a high resolution copy of the rejected application.

8. What will happen to my application if I choose not to provide an email address? Will I receive a copy of my approved or rejected application in the mail?

If you choose not to provide an email address on your application, your application will be scanned and processed electronically by TTB. However, a copy of your approved or rejected application will be mailed to you, or your representative, at the address listed on the application. Consistent with prior policy, if a third party representative personally delivered the application to TTB, and no email address appears on the form, a copy of the approved or rejected application will be placed in your representative's folder. However, these paper-based responses will take significantly longer for you to receive than an electronic response would.

9. How does the new policy affect applications submitted by third-party representatives?

Beginning with applications received on or after February 1, 2013, any paper applications that contain email addresses will be returned to those email addresses, even if the original application was personally delivered by a third party representative. This is the case even if the email address belongs to the applicant and the label is submitted by a representative. Accordingly, if the applicant wishes to have replies sent to the representative rather than the applicant, the representative's email address should appear on the paper application rather than the applicant's. On the other hand, if the applicant wishes to receive responses, then the applicant's email address should be listed on the form. Only one email address may be listed on the form.

10. Questions?

If you have questions concerning this circular, please contact the Advertising, Labeling and Formulation Division at alfd@ttb.gov or call toll free 1–866–927–2533:

  • Option 4 Distilled Spirits and Malt Beverage Labels, or
  • Option 6 Wine Labels.
 

John Manfreda

John J. Manfreda
Administrator
Alcohol and Tobacco Tax and Trade Bureau

 
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