Elimination of Bond Requirement for Users and Dealers of Specially Denatured
     Spirits

     TO: All Specially Denatured Spirits Users and Dealers

     What is the purpose of this Circular?

     This Industry Circular announces the publication of the final rule that eliminates the
     requirement for users and dealers of specially denatured spirits (SDS) to file bonds. We
     published this final rule in the Federal Register on April 12, 2002. It became effective
     June 11, 2002.

     Why is the SDS bond requirement being eliminated?

     The Government originally established the laws and regulations governing SDS to
     protect against loss of revenue if the alcohol were to be diverted to beverage use. From
     1985 to the present, we required certain large volume dealers and users to post bonds,
     in order to qualify for their permits. The potential tax value of a user or dealers annual
     withdrawals determined the amount of the bond.

     Based on our experience regulating this industry, we concluded that SDS users and
     dealers pose minimal risk to the revenue. Therefore, we have eliminated the
     requirement for users and dealers of SDS to file bonds.

     What should I do if I already have an existing bond?

     If you want to discontinue your existing Industrial Alcohol Bond, you must notify us at
     one of the addresses shown in the next section. Please include the following
     information:

              .   Name (permit holder)
              .   Address (permit premises)
              .   Permit number

              Who may I contact for further information?

                  For users and dealers other than in Puerto Rico:

                     Chief, National Revenue Center
                     Bureau of Alcohol, Tobacco and Firearms
                     8002 Federal Office Building
                     550 Main Street
                     Cincinnati, OH  45202-3263.
 
                     Telephone: 513-684-3335

                     For users and dealers in Puerto Rico:
  
                     Chief, Puerto Rico Operations
                     Bureau of Alcohol, Tobacco and Firearms
                     Federico Degatau Federal Building, Suite 670
                     Carlos Chardon Street
                     Hato Rey, Puerto Rico  00918-7015
  
                     Telephone: 787-766-5584

                                                        Director