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:
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in-transit stops of untaxpaid alcohol beverages (distilled
spirits, wine, or beer) or tobacco products you remove for export;
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the types of export shipments allowable without payment of
tax; and
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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:
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 ATFs 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:
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 ATFs position on freight forwarders?
An NVOCC is distinguished from a freight forwarder. Freight forwarders:
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may arrange for warehouse storage of the export goods, and
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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 ATFs 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:
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:
-
bonded wine premises (wine only)
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brewery premises (beer only)
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tobacco manufacturers premises or export warehouse (tobacco
products only)
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Customs bonded warehouse (alcohol beverages onlytobacco
products may go only to a class 9 CBWduty free shop);
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foreign trade zone (FTZ); or
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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:
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.
- Export to a contiguous foreign country (Canada or Mexico).
- Export to a non-contiguous foreign country or transfer to
Puerto Rico and the Virgin Islands.
- 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.
- Transfer to and deposit in a foreign trade zone (FTZ).
- 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)
- Transportation to and deposit in a Customs manufacturing
bonded warehouse (CMBW) (alcohol beverages only).
- 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.
- 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?
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Documents must be of verifiable and arms-length transactionswe
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.
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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.
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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.
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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.
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For spirits and wine, ATF Form 5100.11 certified by Customs
in parts V, VI, and VII.
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For beer, ATF Form 1689 (5130.12) certified by Customs in parts
II, III and IV.
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For tobacco products:
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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.
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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.
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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.
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.)
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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.
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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.
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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.
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For spirits and wine, ATF Form 5100.11 certified by Customs
in parts V and VII.
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For beer, ATF Form 1689 (5130.12) certified by Customs in parts
II and IV.
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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.
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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.
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For spirits and wine, ATF Form 5100.11 certified by Customs
in parts V and VII.
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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.
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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:
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:
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For beer: ATF Form 1689 (5130.12) part II (modify Item 12 G
to show CBW instead of FTZ).
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For tobacco products, through a class 9 CBW (duty free store):
ATF Form 2149/2150 (5200.14) part V.
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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.
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).
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
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Bradley A. Buckles
Director |