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On October 16th, 2018, U.S. Customs and Boarder Protection (CBP) issued additional guidance for importers which revised previous CBP guidance on the implementation of the Craft Beverage Modernization Act (CBMA) and provided importers with general guidelines on how to take advantage of reduced tax rates on imported alcohol beverages. Although the CBP outlines the submission process for claims, post summary corrections, and protests, the overview provided leaves importers and customs brokers with many questions and submission concerns. With potentially hundreds of thousands of dollars on the table, there is a concern among importers that submission errors may delay or even halt the refund process. A consensus among those trying to take advantage of substantial tax refunds is that, when asked for assistance with CBMA submissions, CBP representatives have stated that they too have not been trained on the CBMA submissions and cannot provide guidance on the topic until they have received adequate training. Further, with the federal government shutdown, “non-essential” customs employees, which include drawback specialists who should theoretically be in the position to provide guidance, are not available to answer technical submission questions at the most critical stage in the submission process, where importers are scrambling to submit their 2018 protests and post summary corrections before January 31, 2019. Specific challenges to submissions include obtaining foreign supplier sign-off on the assignment certification letters, properly identifying the supplier control group for purposes of calculating both annual production and the assignment allocations bestowed upon multiple importers by one control group (to ensure that the foreign supplier has…

The Alcohol and Tobacco Tax and Trade Bureau (TTB) has announced that they have officially closed due to a lapse in government funding. The TTB has advised industry members that only websites supporting excepted functions will be updated unless otherwise funded.  The TTB website, www.ttb.gov, will be available during this shutdown period, and users will continue to be able to file electronic payments and returns for federal excise taxes and operational reports throughhttps://www.pay.gov/paygov/. Users will also be able to access TTB’s eGovernment applications, including Permits Online, Formulas Online, and COLAs Online, during the shutdown period, but submissions will not be reviewed or approved until appropriations are enacted.  In addition, other information on the website may not be up to date, and TTB will not be able to respond to questions or comments submitted via the website until appropriations are enacted. TTB has directed employees NOT to report to work and that they are prohibited by federal law from volunteering their services during a lapse in appropriations. Once funding has been restored and the government shutdown is over, the TTB will work to restore regular service as soon as possible. It is unclear how many TTB employees will continue working during the current government shutdown, or how long the shutdown will last.

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On Monday, November 26, 2018, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a lengthy 132 page Notice No. 176:  Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits, and Malt Beverages in the Federal Register.  The TTB is proposing to make significant changes to its regulations governing the labeling and advertising of wine, distilled spirits, and malt beverages by reorganizing and recodifying their regulations in order to simplify and clarify regulatory standards, incorporate guidance documents and current policy into the regulations, and reduce the regulatory burden on industry members where possible.    As proposed, 27 CFR parts 4, 5, and 7 continue to contain the labeling regulations for wine, distilled spirits, and malt beverages, respectively, while the current subparts of parts 4, 5, and 7 that relate to advertising would be removed from those parts and consolidated into a new part 14. The new amendments range from the inclusion of “agave spirits”  as a class of distilled spirits  recognizing ‘‘Mezcal’’ as a type within that class, to adding a new standard of identity for Absinthe.  In addition, to mirror a proposed change in the part 5 regulations, the TTB is also proposing to amend 27 CFR part 19 to increase the alcohol content tolerance for distilled spirits to 0.3 percent alcohol by volume above or below the labeled alcohol content in order to allow greater flexibility and business efficiencies for bottlers. The TTB is encouraging comments, suggestions, and feedback from industry members. To view the proposed rule and…