TAX NEWS - may 2010
Frequently Asked Questions on TTB Industry Circular 2010-5
TTB does not have Industry Circular 2010-5 available in French.
2. Does the declaration have to be an original?
No, a copy of the declaration will suffice.
3. Does each shipment require a declaration?
No. One declaration is sufficient to cover each lot of wine (so long as the brand name, appellation of origin, vintage date, if any, and producer are the same), whether exported from France in one shipment to one importer, or in multiple shipments to multiple importers.
4. We understood that only certain French suppliers were identified as selling fraudulent pinot noir. Obviously, we will comply with TTB requests but don't want to put a hold on wines that are outside the scope of the problem. How should we proceed?
As stated in the Industry Circular, industry members must comply with the requirement to obtain a declaration from the Government of France for all bottled or bulk wine from the Languedoc-Roussillon region of France covered by a Certificate of Label Approval naming pinot noir as the single grape varietal and an appellation of origin in the Languedoc-Roussillon region of France.
5. Who in France will issue the certification? Can you identify the specific French Government agency that should provide the requested declaration? If so, do you have a contact person/address/number?
That is still being worked out in France, but the declaration will most likely be issued by either the National Labeling and Quality Institute (INAO), or the General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF). We will publish this information on our website once the Government of France has confirmed.
6. Was the French government notified of this in advance? Do you know whether they are set up to provide the requested information?
TTB has been communicating with the Government of France for many months. We have every indication that the Government of France is preparing procedures to protect the legitimate trade and issue declarations certifying pinot noir from Languedoc-Roussillon that meets French rules.
7. If we are not able to get the requested declaration through our supplier in France, can we (as the importer) attempt to get this directly from the appropriate French government agency? If so, do you have any guidance/direction in this regard.
U.S. industry members may attempt to obtain the declaration directly from the Government of France. Please note that the Government of France may not be able to provide a declaration certifying all exports sold as "pinot noir."
8. If we are not able to get the requested declaration through our supplier and/or directly, what if anything can we do with bottled wine in inventory?
The marketing of mislabeled wine is prohibited under the Federal Alcohol Administration Act (FAA Act). If an industry member has wine in inventory and the industry member is not certain that the wine is eligible to be labeled as pinot noir, the industry member has several options, including, but not limited to, labeling and marketing the wine as "red wine" or "red table wine," or using the wine as part of a blend (as long as the blended wine is then labeled properly).
9. Regarding permittees in the U.S. who have existing stocks of pinot noir from Languedoc-Roussillon, how far back in time will TTB require them to get a declaration? E.g., two weeks, two months?
Anyone who has existing stock of bulk pinot noir from Languedoc-Roussillon and wishes to bottle it with an appellation of origin listed in Annex 1 of the Industry Circular must obtain the declaration from the Government of France described in the Industry Circular.
10. With respect to the 30 day time period for existing bottled inventory, what does that mean? Is it permissible to continue to sell product during that time period? If so and one is not able to get the declaration within 30 days, what is the consequence? Also, what if one is able to get the declaration but it takes longer than 30 days?
Industry members with existing bottled inventory must obtain a declaration from the Government of France within 30 days of May 3, 2010. If the industry member cannot obtain the declaration within 30 days, the industry member may relabel the wine as "red wine" rather than pinot noir, voluntarily detain the wine until the declaration can be obtained, use the wine in a blend, or take other measures. Please be aware that the Government of France may not be able to provide a declaration certifying all exports sold as "pinot noir." TTB reminds industry members that it is unlawful under the FAA Act to willfully market mislabeled wine.
11. Once you have the declaration, can you start selling the product again?
If the Government of France has certified the wine pursuant to Industry Circular 2010-5, then the wine may be labeled and marketed as pinot noir.
12. The next to last paragraph on page 3 of the circular discusses importers who are in receipt of shipments on or after May 3, 2022 which were en-route to the U.S. prior to the effective date of the circular (May 3, 2022). A declaration must be obtained for shipments that were in the shipping channel prior to the date of the circular. Does this requirement apply only to bottled and labeled goods that fall into the category of "in shipping status" on and prior to the effective date of the circular?
TTB is requiring that importers have the declaration in their possession when bottled wine at issue is released from customs custody. However, TTB is allowing importers who receive bottled wine that was shipped before May 3, 2010, thirty days to obtain the declaration.
13. The circular distinguishes product imported in bulk and bottled in the U.S. with a French labeled appellation as requiring a declaration on or before June 2, 2010. What treatment will be applied to existing inventory at the import/wholesale and retail level that was produced and bottled in France with a covered French appellation, having cleared customs more than 30 days ago?
The industry circular states that "TTB cautions importers, wholesalers, bonded wineries, and bonded wine cellars that the marketing of a mislabeled wine is unlawful under the FAA Act. Where TTB finds a willful violation of the FAA Act, TTB may take appropriate action which could include suspension or revocation of a permit." If an importer or wholesaler has any of the wine described in the industry circular in its inventory, the importer or wholesaler must obtain the declaration, even if the wine cleared customs more than 30 days ago. Please note that the statement in the industry circular does not apply to retailers.
14. How will this declaration requirement affect my applications for Certificates of Label Approval (COLA)?
The requirement outlined in TTB Industry Circular 2010-5 will generally not affect COLA applications. However, COLAs issued for wine labels stating pinot noir as the single grape varietal and one of the appellation of origin names listed in Annex 1 of the Industry Circular will note that "compliance with Industry Circular 2010-5 is required."
15. What will the declaration look like?
TTB has provided the French Government with a draft suggested declaration, and so we expect the declaration provided by the French Government could look like the following (but please note that this is not a required form or format):
[Government of France Agency Letterhead]
Government of France Declaration Certifying Pinot Noir from Languedoc-Roussillon
I, the undersigned, ______________________________________,
In my capacity as [Title] of [Agency], declare that the [vintage date] [brand name] Pinot Noir from the appellation of origin [appellation name: d'Oc, l'Hérault, Pyrenées-Orientales, l'Aude, or Gard], produced by [producer name] of [address], consists of not less that 85% Pinot Noir which was grown in the labeled appellation of origin area, conforms to all other requirements of the French laws and regulations governing such wine, and is acceptable for sale as labeled in France.
The Government of France is able to make this declaration because [the basis on which the wine can be certified].