[Federal Register Volume 64, Number 245 (Wednesday, December 22, 1999)]
[Rules and Regulations]
[Pages 71947-71954]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32600]
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DEPARTMENT OF THE TREASURY
Bureau of Alcohol, Tobacco and Firearms
27 CFR Part 275
[T.D. ATF--422; Re: Notice No. 888]
RIN 1512-AC07
Implementation of Public Law 105-33, Section 9302, Requiring the
Qualification of Tobacco Product Importers (98R-316P) And Miscellaneous
Technical Amendments
AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of
the Treasury.
ACTION: Temporary rule (Treasury decision).
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SUMMARY: This temporary rule implements some of the provisions of the
Balanced Budget Act of 1997. The new law sets forth the requirement
that, beginning January 1, 2000, importers of tobacco products qualify
for a permit to conduct that activity. Implementing changes, including
a transitional rule, are made to part 275. In addition, clarifying
changes are made to part 275. In the Proposed Rules section of this
Federal Register, ATF is also issuing a notice of proposed rulemaking
inviting comments on this temporary rule for a 60-day period following
the publication of this temporary rule.
DATES: Effective December 22, 1999.
FOR FURTHER INFORMATION CONTACT: Clifford A. Mullen by writing to
Regulations Division, Bureau of Alcohol, Tobacco and Firearms, 650
Massachusetts Avenue, NW, Washington, DC 20226, by phone at 202-927-
8210, or by e-mail at alctob@atfhq.atf.treas.gov.
SUPPLEMENTARY INFORMATION:
Background
This temporary rule implements some of the provisions of the
Balanced Budget Act of 1997, Public Law 105-33 (``the Act''). These
provisions amended the Internal Revenue Code of 1986 (IRC) to require
that, beginning January 1, 2000, importers of tobacco products qualify
for a permit to conduct that activity.
Current Regulation of Tobacco Products Importation
The Bureau of Alcohol, Tobacco and Firearms (ATF) regulates the
importation of tobacco products under the IRC, and in the Code of
Federal Regulations, 27 CFR part 275. Before the enactment of the Act,
no permit qualification requirement existed for importers of tobacco
products.
The Act amended sections 5712 and 5713 of the IRC to require, in
part, that importers of tobacco products apply for and obtain a permit
before commencing business as an importer. The Act also provided a
transitional rule to allow existing importers of tobacco products or
cigarette papers and tubes, who file an application for a permit with
ATF before January 1, 2000, to continue in such business pending final
action on their application.
Under the temporary rule, persons who are already engaged in the
business as an importer of tobacco products may continue in such
business after January 1, 2000, provided they file an application for a
permit with ATF before January 1, 2000. Such persons will be issued a
temporary permit, which will remain valid for a period of one year or
until a final determination is made on their application, if a final
determination has not been made within that time. All others must
obtain a permit before engaging in the business as an importer of
tobacco products or cigarette papers and tubes beginning January 1,
2000.
Only manufacturers and export warehouse proprietors may import
tobacco products in bond. Therefore, no bond need be filed by any other
importer of tobacco products in conjunction with the permit, because
such importers are not authorized to import tobacco products without
payment of tax upon release from customs custody.
Fully qualified applicants will be issued a permit limited to a
three-year duration. A three-year permit duration was determined to be
a reasonable method to avoid the proliferation of numerous unused
permits, which would pose administrative difficulties and potential
jeopardy to the revenue. Keeping track of unused permits would strain
limited resources, and such permits could eventually fall into the
hands of unqualified persons who would be unknown and unaccountable to
ATF. Administrative controls will be put in place to facilitate timely
renewals by permittees.
In addition, Part 275, Subpart G--Puerto Rican Tobacco Products and
Cigarette Papers and Tubes, brought into the United States, contains
obsolete requirements for the release of Puerto Rican tobacco products
and cigarette papers and tubes from Customs custody without payment of
tax. Accordingly, subpart G is being amended to eliminate the obsolete
requirements under this temporary rule.
Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the
provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do
not apply. Moreover, any revenue effects of this rulemaking on small
businesses flow directly from the underlying statute. Likewise, any
secondary or incidental effects, and any reporting, recordkeeping, or
other compliance burdens flow directly from the statute. Pursuant to 26
U.S.C. 7805(f), this temporary regulation will be submitted to the
Chief Counsel for Advocacy of the Small Business Administration for
comment on its impact on small business.
Executive Order 12866
It has been determined that this temporary rule is not a
significant regulatory action as defined by Executive Order 12866.
Therefore, a regulatory assessment is not required.
Paperwork Reduction Act
This regulation is being issued without prior notice and public
procedure pursuant to the Administrative Procedure Act (5 U.S.C. 553).
For this reason, the collection of information contained in this
regulation has been reviewed under the requirements of the Paperwork
Reduction Act (44 U.S.C. 3507(j)), and pending receipt and evaluation
of
[[Page 71948]]
public comments, approved by the Office of Management and Budget (OMB)
under control number 1512-0398. An agency may not conduct or sponsor,
and a person is not required to respond to, a collection of information
unless it displays a valid control number assigned by OMB.
The collection of information initiated by this document is found
in 27 CFR 275.204 and 275.205. This information is required to ensure
proper payment of excise taxes on imported tobacco products and
cigarette papers and tubes.
For further information concerning this collection of information,
and where to submit comments on the collection of information, refer to
the preamble of the cross-referenced notice of proposed rulemaking
published elsewhere in this issue of the Federal Register.
``Plain Language'' Changes
During the revision of the regulations in this document, we also
tried to simplify and clarify the language of the affected regulations.
Any suggestions for improving the readability of these regulations may
be submitted as comments to the cross-referenced notice of proposed
rulemaking.
Delegations
In the sections of the regulations that are affected by this
document, we have changed obsolete ATF titles to read ``the appropriate
ATF officer'' and referred to a delegation order that specifies the
current title of the ATF official responsible for each activity. The
titles of responsible persons in the remaining sections of these parts
will be updated by a future technical amendment.
Administrative Procedure Act
Because this document merely implements sections of the law which
are effective on January 1, 2000, and because immediate guidance is
necessary to implement the provisions of the law, it is not found to be
necessary to issue this Treasury decision with notice and public
procedure under 5 U.S.C. 553(b) or subject to the effective date
limitation in section 553(d).
Drafting Information
The principal author of this document is Clifford A. Mullen, of the
Regulations Division, Bureau of Alcohol, Tobacco and Firearms. However,
other personnel of ATF and the Treasury Department participated in
developing the document.
List of Subjects in 27 CFR Part 275
Administrative practice and procedure, Authority delegations,
Cigarette papers and tubes, Cigars and cigarettes, Claims, Customs
duties and inspections, Electronic funds transfers, Excise taxes,
Imports, Labeling, Packaging and containers, Penalties, Reporting and
record keeping requirements, Seizures and forfeitures, Surety bonds,
U.S. Possessions, Warehouses.
Authority and Issuance
Par. 1. The authority citation for 27 CFR part 275 is revised to
read:
Authority: 26 U.S.C. 5701, 5703, 5704, 5705, 5706, 5708, 5712,
5713, 5721, 5722, 5723, 5741, 5761, 5762, 5763, 6301, 6302, 6313,
6404, 7101, 7212, 7342, 7606, 7652, 7805; 31 U.S.C. 9301, 9303,
9304, 9306; 18 U.S.C. 2342.
Par. 2-3. Section 275.11 is amended by removing the definition of
``District director of customs,'' revising the definition of ``Removal
or Remove,'' and adding the definitions for ``Appropriate ATF
officer,'' ``Customs officer, ``Port director of Customs,'' and
``Records'' to read in alphabetical order as follows:
Sec. 275.11 Meaning of terms.
* * * * *
Appropriate ATF officer. An officer or employee of the Bureau of
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions
relating to the administration or enforcement of this part by ATF Order
1130.16, Delegation Order--Delegation of the Director's Authorities in
27 CFR Part 275, Importation of Tobacco Products and Cigarette Papers
and Tubes.
* * * * *
Customs officer. Any officer of the Customs Service or any
commissioned, warrant, or petty officer of the Coast Guard, or any
agent or other person authorized by law or designated by the Secretary
of the Treasury to perform any duties of an officer of the Customs
Service.
* * * * *
Port Director of Customs. The director of any port or port of entry
as defined in 19 CFR 101.1. A list of ports is set forth in 19 CFR
101.3.
* * * * *
Records. Statements, declarations, books, papers, correspondence,
accounts, technical data, automated record storage devices (e.g.,
magnetic discs and tapes), computer programs necessary to retrieve
information in a usable form, and other documents that:
(1) Pertain to any importation of tobacco products or cigarette
papers or tubes, or to the information contained in the documents
required by law or regulation under the Tariff Act of 1930, as amended,
in connection with the importation of merchandise; and
(2) Are of the type normally kept in the ordinary course of
business; and
(3) Are sufficiently detailed to:
(i) Establish the right to make the importation;
(ii) Establish the correctness of any importation;
(iii) Determine the liability of any person for duties and taxes
due, or which may be due, to the United States;
(iv) Determine the liability of any person for fines, penalties,
and forfeitures; and
(v) Determine whether the person has complied with the laws and
regulations administered by ATF and the Customs Service, and any other
documents required under laws or regulations administered by ATF and
the Customs Service.
* * * * *
Removal or Remove. The removal of tobacco products or cigarette
papers or tubes from the factory or release from internal revenue bond
under 26 U.S.C. 5704, or release from customs custody, including
conditional release in accordance with 19 CFR 141.0a(i), and shall also
include the smuggling or other unlawful importation of such articles
into the United States.
* * * * *
Par. 4. The fourth sentence of Sec. 275.25 is revised to read as
follows:
Sec. 275.25 Disposal of forfeited, condemned, and abandoned tobacco
products and cigarette papers and tubes.
* * * Except where the tax is to be paid to the Port Directors of
Customs or other authorized customs officer in accordance with Customs
regulations (19 CFR part 127) on sales of articles by customs officers,
the payment of tax on such articles must be evidenced by presentation,
to the officer having custody of the articles, of a receipt from the
appropriate ATF officer showing such payment. * * *
* * * * *
Sec. 275.39 [Removed and reserved]
Par. 5. Section. 275.39 is removed and reserved.
Par. 6. Section 275.40 is revised to read as follows:
Sec. 275.40 Persons liable for tax.
The importer of tobacco products or cigarette papers and tubes will
be liable for the internal revenue taxes imposed thereon by 26 U.S.C.
5701 or 7652: Provided, That tobacco products or cigarette papers or
tubes (other than those previously exported and returned)
[[Page 71949]]
imported or brought into the United States, may be released from
customs custody without payment of tax, for delivery to the proprietor
of an export warehouse, to a manufacturer of tobacco products, or to a
manufacturer of cigarette papers or tubes (except for tobacco
products), if such articles are not put up in packages (see
Sec. 275.11). Under these circumstances the transferee will become
liable for the internal revenue tax on such articles upon release from
customs custody and the importer will thereupon be relieved of the
liability for such tax. If the transferee is also the importer, then
the importer will not be relieved of the liability for such tax.
Par. 7. Section 275.41 is revised to read as follows:
Sec. 275.41 Determination and payment of tax.
Tobacco products and cigarette papers and tubes, imported or
brought into the United States, on which internal revenue taxes are due
and payable, must not be released from customs custody until such taxes
have been determined and paid.
Par. 8. The last sentence of Sec. 275.50 and the undesignated
centerheading preceding it are revised to read as follows:
Exemptions From Taxes and Permits
Sec. 275.50 Exemptions.
* * *. These exemptions include, but are not limited to, certain
importations in passengers' baggage, for use of crew members, and by
foreign officials. Those persons importing tobacco products and
cigarette papers or tubes as described in this section are not required
to obtain a permit.
Par. 9. Section 275.62 is revised to read as follows:
Sec. 275.62 Customs' collection of internal revenue taxes on tobacco
products and cigarette papers and tubes, imported or brought into the
United States.
Internal revenue taxes on tobacco products and cigarette papers and
tubes, imported or brought into the United States, which are to be paid
to the Port Director of Customs or other authorized customs employee,
in accordance with this part, must be collected, accounted for, and
deposited as internal revenue collections by the Port Director of
Customs, in accordance with customs procedures and regulations.
Par. 10. Paragraphs (a), (b), and (c), introductory text, of
Sec. 275.81 are revised to read as follows:
Sec. 275.81 Taxpayment.
(a) General. The provisions of this section apply to tobacco
products, cigarette papers, and cigarette tubes upon which internal
revenue tax is payable, and which are imported into the United States
from a foreign country or are brought into the United States from
Puerto Rico, the Virgin Islands, or a possession of the United States.
(b) Method of payment. Except in the case of articles imported or
brought into the United States under Sec. 275.85 and 275.85a, the
internal revenue tax must be determined and paid to the Port Director
of Customs before the tobacco products, cigarette papers, or cigarette
tubes are removed from customs custody. The tax must be paid on the
basis of a return on the customs form or by authorized electronic
transmission by which the tobacco products, cigarette papers, or
cigarette tubes are duty and taxpaid to Customs.
(c) Required information. When tobacco products, cigarette papers,
or cigarette tubes enter the United States for consumption, or when
they are removed for consumption, the importer must include on the
customs form or authorized electronic transmission the following
internal revenue tax information.
(1) * * *
* * * * *
Par. 11. Section 275.85 is revised to read as follows:
Sec. 275.85 Release from customs custody of imported tobacco articles.
(a) The provisions of this section apply only to tobacco products,
cigarette papers, and cigarettes tubes, which are not put up in
packages, i.e., not placed by the manufacturer or importer in packages
in which the products will be sold to consumers. Tobacco products
manufactured in a foreign country, the Virgin Islands, or a possession
of the United States may be released by the Port Director of Customs or
authorized customs officer from customs custody, without payment of
internal revenue tax, for transfer to the factory of any manufacturer
of tobacco products under the internal revenue bond of the manufacturer
to whom such articles are released. Cigarette papers and tubes
manufactured in a foreign country, the Virgin Islands, or a possession
of the United States may be released by the Port Director of Customs or
authorized customs officer from customs custody, without payment of
internal revenue tax, for transfer, under the internal revenue bond of
the manufacturer to whom such articles are released, to the factory of
a manufacturer of cigarette papers and tubes; or a manufacturer of
tobacco products solely for use in the manufacture of cigarettes.
Releases under this section must be in accordance with Sec. 275.86:
Provided, however, that in the case of products exported from the
Virgin Islands, in order for a manufacturer of tobacco products or a
manufacturer of cigarette papers and tubes to remove such products from
customs custody in the United States under the manufacturer's internal
revenue bond without payment of internal revenue tax, the manufacturer
must file an extension of coverage of the internal revenue bond on ATF
Form 2105, and receive a notice of approval from the appropriate ATF
officer. The extension of coverage must be executed by the principal
and the surety and must be in the following form:
``Whereas the purpose of this extension is to bind the obligors
for the purpose of the tax imposed by 26 U.S.C. 7652(b), on tobacco
products and tubes exported from the Virgin Islands and removed from
customs custody in the United States without payment of internal
revenue tax, for delivery to the principal on said bond.''
``Now, therefore, the said bond is further specifically
conditioned that the principal named therein must pay all taxes
imposed by 26 U.S.C. 7652(b) plus penalties, if any, and interest,
for which he may become liable with respect to these products
exported from the Virgin Islands and removed from customs custody in
the United States without payment of internal revenue tax thereon,
and must comply with all provision of law and regulations with
respect thereto.''
(b) Articles received into the factory of a manufacturer under the
provision of this section are subject to the provisions of part 270 of
this chapter.
Par. 12. Section 275.85a is revised to read as follows:
Sec. 275.85a Release from customs custody of returned articles.
(a) Domestically produced tobacco products (classifiable under item
9801.00.80 of the Harmonized Tariff Schedule of the United States, 19
U.S.C. 1202) exported from and returned to the United States without
change to the product or the shipping container may be released, under
the bond of the manufacturer or export warehouse proprietor to whom
such articles are released, from customs custody in the United States
without payment of that part of the duty attributable to the internal
revenue tax for delivery to the factory of any tobacco products
manufacturer or to the permit premises of an export warehouse
proprietor.
(b) Domestically produced cigarette papers and tubes (classifiable
under item 9801.00.80 of the Harmonized Tariff Schedule of the United
States, 19 U.S.C. 1202) exported from and returned to the United States
without change to the product or the shipping
[[Page 71950]]
container may be released from customs custody in the United States
without payment of that part of the duty attributable to the internal
revenue tax for delivery, under the bond of the manufacturer to whom
such articles are released, to the factory of:
(1) A manufacturer of cigarette papers and tubes; or
(2) A manufacturer of tobacco products solely for use in the
manufacture of cigarettes.
(c) Releases under this section must be in accordance with the
procedures set forth in Sec. 275.86. Once released, the tobacco
products and cigarette papers and tubes will be subject to the tax and
all other provisions of 26 U.S.C. chapter 52, and, as applicable,
subject to the provisions of the regulations in part 270 of this
chapter as if they had not been exported or otherwise removed from
internal revenue bond.
Par. 13. Section 275.86 is revised to read as follows:
Sec. 275.86 Procedure for release.
(a) Every manufacturer of tobacco products and cigarette papers and
tubes and every export warehouse proprietor who desires to obtain the
release of tobacco products and cigarette papers and tubes from customs
custody, without payment of internal revenue tax, under its internal
revenue bond, as provided in Sec. 275.85 or Sec. 275.85a, must prepare
a notice of release, Form 2145, in triplicate, and file the three
copies of the form with the appropriate ATF officer. The appropriate
ATF officer will not certify Form 2145 covering the release of tobacco
products and cigarette papers and tubes unless the manufacturer is
authorized, under part 270 of this chapter, to receive, without payment
of tax, the kinds of articles set forth in the form.
(b) Importers who are either manufacturers of tobacco products and
cigarette papers and tubes or export warehouse proprietors, or their
authorized agents, who request the release of tobacco products or
cigarette papers and tubes from customs custody in the United States
under this section, using customs electronic filing procedures, must
not request such release until they have received the ATF Form 2145
certified by the appropriate ATF officer. Once Customs releases the
tobacco products or cigarette papers and tubes in accordance with 19
CFR Part 143, Customs Directives, and any other applicable
instructions, the importer will send a copy of the ATF Form 2145 along
with a copy of the electronic filing and customs release to the
appropriate ATF officer at the address shown thereon. The importer will
retain one copy of the ATF Form 2145 to meet ATF recordkeeping
requirements and one copy to meet customs recordkeeping requirements.
(c) Importers or their authorized agents requesting release of
tobacco products or cigarette papers and tubes from customs custody in
the United States under any other authorized procedure will submit all
copies of the ATF Form 2145 to the appropriate customs officer along
with their request for release. The customs officer will verify that
the ATF Form 2145 has been certified by the appropriate ATF officer and
return all copies to the importer or the importer's authorized
representative.
(d) Once Customs releases the tobacco products or cigarette papers
and tubes in accordance with 19 CFR Part 143, Customs Directives, and
any other applicable instructions, the importer will send a copy of the
ATF Form 2145 along with a copy of the customs release to the
appropriate ATF office at the address shown thereon. The importer will
retain one copy of the ATF Form 2145 to meet ATF recordkeeping
requirements and one copy to meet customs recordkeeping requirements.
Sec. 275.101 [Amended]
Par. 14. Section 275.101 is amended by removing paragraphs (d) and
(e).
Par. 15. Section 275.106 is revised to read as follows:
Sec. 275.106 Inspection of shipment and certification of prepayment by
ATF officer.
The taxpayer will prepare ATF Form 3075 (5200.9), in triplicate,
identifying the tobacco products and cigarette papers and tubes
released in each shipment, for certification by the ATF officer that
the tax has been prepaid. The ATF officer assigned to inspect the
shipment must obtain the receipted copy of the tax return from the
taxpayer and verify on ATF Form 3075 (5200.9) that the proper tax has
been prepaid. After verification of the tax return on ATF Form 3075
(5200.9), the ATF officer will return the receipted copy of the tax
return to the taxpayer. The ATF officer will then present one copy of
ATF Form 3075 (5200.9) to the taxpayer for attachment to the bill of
lading to accompany the shipment, mail one copy to the appropriate ATF
officer, and retain the remaining copy. The ATF officer will then
prepare for each shipping container, a statement on ATF Form 3074
(5200.6) that the tax has been prepaid, and show the other information
required by that form. The shipper must affix the completed ATF Form
3074 (5200.6) to the outside of each shipping container in which the
articles are packed. Such statement, ATF Form 3074 (5200.6), must be
affixed to the outside container used in the shipment of freight in
bulk (crate, packing box, van, trailer, etc.) and not to the individual
cartons, cases, etc., included in such outer container. Noncommercial
mail shipments of tobacco products and cigarette papers and tubes to
the United States are exempt from the provisions of this section,
except that the ATF officer in Puerto Rico receiving a payment of
internal revenue tax on mail shipments of such articles will prepare a
certificate to be affixed to the container stating that the United
States internal revenue tax has been prepaid on the articles contained
therein.
Sec. 275.107 [Removed and reserved]
Par. 16. Section 275.107 is removed and reserved.
Sec. 275.108 [Removed and reserved]
Par. 17. Section 275.108 is removed and reserved.
Par. 18. Section 275.110 is amended by revising the first sentence
to read as follows:
Sec. 275.110 Computation of tax and execution of agreement to pay tax.
Where tobacco products are to be shipped to the United States on
computation of internal revenue tax in Puerto Rico (involving deferred
taxpayment), the bonded manufacturer must calculate the tax and must
prepare an original and two copies of Form 2987 (5210.8).
* * * * *
Par. 19. Section 275.111 is amended by revising the introductory
text, paragraphs (a), (b), and (c) to read as follows:
Sec. 275.111 Inspection of shipment and certification by ATF officer.
On receipt of the original and two copies of the Form 2987 (5210.8)
completed and executed by the bonded manufacturer in accordance with
Sec. 275.110, an ATF officer will inspect the tobacco products covered
by the form, verify the tax calculation made with respect to such
products, date and execute the certification on such form, and release
the tobacco products for shipment to the United States. Such officer
will then promptly distribute the certified Form 2987 by:
(a) Mailing one copy to the appropriate ATF officer;
(b) Returning one copy to the bonded manufacturer and
(c) Submitting the original to the Chief, Puerto Rico Operations.
* * * * *
Par. 20. Section 275.115a, paragraph (e), is revised to read as
follows:
[[Page 71951]]
Sec. 275.115a Payment of tax by electronic fund transfer.
* * * * *
(e) Procedure. Upon the notification required under paragraph
(b)(1) of this section, the appropriate ATF officer will issue to the
taxpayer an ATF Procedure entitled, Payment of Tax by Electronic Fund
Transfer. This publication outlines the procedure a taxpayer is to
follow when preparing returns and EFT remittances in accordance with
this part.
Sec. 275.117 [Removed and reserved]
Par. 21. Section 275.117 is removed and reserved.
Sec. 275.118 [Removed and reserved]
Par.22. Section 275.118 is removed and reserved.
Par. 23. The undesignated center heading preceding Sec. 275.135 is
removed.
Secs. 275.135--275.138 [Removed and reserved]
Par. 24. Sections 275.135 through 275.138 are removed and reserved.
Par. 25. The first sentence in Sec. 275.140 is revised to read as
follows:
Sec. 275.140 Taxpayment in the United States.
Every manufacturer of tobacco products or cigarette papers or tubes
in the United States who receives Puerto Rican tobacco products or
cigarette papers or tubes without payment of internal revenue tax,
under his bond, and subsequently removes such products, subject to tax,
must pay the tax imposed on such products by 26 U.S.C. 7652(a), at the
rates prescribed in 26 U.S.C. 5701, on the basis of a return under the
provisions of part 270 of this chapter applicable to the taxpayment of
tobacco products. * * *
Par. 26. The first sentence in Sec. 275.141 is revised to read as
follows:
Sec. 275.141 Reports.
Every manufacturer of tobacco products or cigarette papers or tubes
in the United States who receives Puerto Rican tobacco products, or
cigarette papers or tubes without payment of internal revenue tax,
under his bond, must report the receipt and disposition of such tobacco
products and cigarette papers and tubes on supplemental monthly
reports. * * *
Par. 27. Subpart K is added to read as follows:
Subpart K--Tobacco Products Importers
Sec.
275.190 Persons required to qualify.
275.191 Application for permit.
275.192 Transitional rule.
275.193 Corporate documents.
275.194 Articles of partnership or association.
275.195 Trade name certificate.
275.196 Power of attorney.
275.197 Additional information.
275.198 Investigation of applicant.
275.199 Notice of Contemplated Disapproval.
275.200 Issuance of permit.
275.201 Duration of permit
275.202 Renewal of permit.
275.203 Retention of permit and supporting documents.
Required Records and Reports
275.204 General.
275.205 Recordkeeping requirements.
Filing and Retention of Records and Reports
275.206 Reports.
275.207 Filing.
275.208 Retention.
Subpart K--Tobacco Products Importers
Sec. 275.190 Persons required to qualify.
Any person who engages in the business as an importer of tobacco
products must qualify as an importer of tobacco products in accordance
with the provisions of this part. Any person eligible for the exemption
in Sec. 275.50 is not engaged in the business as an importer of tobacco
products.
Persons importing tobacco products and cigarette papers and tubes
for personal use, in such quantities as may be allowed by Customs
without payment of tax, do not require an importer's permit.
Sec. 275.191 Application for permit.
Except as provided in Sec. 275.192, every person, before commencing
business as an importer of tobacco products as defined in Sec. 275.11,
must make application for, and obtain, the permit provided by this
subpart K. Such application must be made on ATF Form 5230.4, according
to the instructions for the form. All documents required under this
part to be furnished with such application must be made a part thereof.
Sec. 275.192 Transitional rule.
Any person who--
(a) Was engaged in the business as an importer of tobacco products
before January 1, 2000, and
(b) Who files an application with ATF before January 1, 2000, may
continue to import tobacco products and cigarette papers and tubes
pending action on their application by ATF. Pending such final action,
all provisions of chapter 52 of the Internal Revenue Code of 1986 will
apply to such applicant.
Sec. 275.193 Corporate documents.
Every corporation, before commencing business as an importer of
tobacco products, must furnish with its application for permit,
required by Sec. 275.191, a true copy of the corporate charter or a
certificate of corporate existence or incorporation executed by the
appropriate officer of the State in which incorporated. The corporation
must likewise furnish duly authenticated extracts of the stockholders'
meetings, bylaws, or directors' meetings, listing the offices the
incumbents of which are authorized to sign documents or otherwise act
in behalf of the corporation in matters relating to 26 U.S.C. chapter
52, and regulations issued thereunder. The corporation must also
furnish evidence, in duplicate, of the identity of the officers and
directors and each person who holds more than ten percent of the stock
of such corporation. Where any of the information required by this
section has previously been filed with the appropriate ATF officer, and
such information is currently complete and accurate, a written
statement to that effect, in duplicate, will be sufficient for the
purpose of this section.
Sec. 275.194 Articles of partnership or association.
Every partnership or association, before commencing business as an
importer of tobacco products, must furnish with its application for
permit required by Sec. 275.191 a true copy of the articles of
partnership or association, if any, or certificate of partnership or
association where required to be filed by any State, county, or
municipality. Where a partnership or association has previously filed
such documents with the appropriate ATF officer and such documents are
currently complete and accurate, a written statement, in duplicate, to
that effect by the partnership or association will be sufficient for
the purpose of this section.
Sec. 275.195 Trade name certificate.
Every person, before commencing business under a trade name as an
importer of tobacco products, must furnish with his application for a
permit, required by Sec. 275.191, a true copy of the certificate or
other document, if any, issued by a State, county, or municipal
authority in connection with the transaction of business under such
trade name. If no such true copy of the certificate or other document
is so required, a written statement, in duplicate, to that effect by
such person will be sufficient for the purpose of this section.
Sec. 275.196 Power of attorney.
If the application for permit or any report, return, notice,
schedule, or other
[[Page 71952]]
document required to be executed is to be signed by an individual
(including one of the partners for a partnership or one of the members
of an association) as an attorney in fact for any person, or if an
individual is to otherwise officially represent such person, power of
attorney on Form 1534 must be furnished to the appropriate ATF officer.
(For power of attorney in connection with conference and practice
requirements see subpart E, part 70 of this chapter.) Such power of
attorney is not required for persons whose authority is furnished with
the corporate documents as required by Sec. 275.194. Form 1534 does not
have to be filed again with the appropriate ATF officer if such form
has previously been submitted to ATF and is still in effect.
Sec. 275.197 Additional information.
The appropriate ATF officer may require such additional information
as may be deemed necessary to determine whether the applicant is
entitled to a permit under the provisions of this part. The applicant
must, when required by the appropriate ATF officer, furnish as a part
of his application for such permit such additional information as the
appropriate ATF officer deems necessary to determine whether the
applicant is entitled to a permit.
Sec. 275.198 Investigation of applicant.
Appropriate ATF officers may inquire or investigate to verify the
information in connection with an application for a permit. The
investigation will ascertain whether the applicant is, by reason of his
business experience, financial standing, and trade connections, likely
to maintain operations in compliance with 26 U.S.C. chapter 52, and
regulations thereunder; whether the applicant has disclosed all
material information required, or whether the applicant has made any
material false statement in the application for such permit.
Sec. 275.199 Notice of Contemplated Disapproval.
If the appropriate ATF officer has reason to believe that the
applicant is not entitled to a permit, the appropriate ATF officer will
promptly give to the applicant a notice of the contemplated disapproval
of the application and opportunity for hearing thereon in accordance
with part 200 of this chapter. If, after such notice and opportunity
for hearing, the appropriate ATF officer finds that the applicant is
not entitled to a permit, an order will be prepared stating the
findings on which the permit request is denied.
Sec. 275.200 Issuance of permit.
If the application for permit, together with the required
supporting documents, is approved, the appropriate ATF officer will
issue a permit on ATF F 5200.24 to the applicant as an importer of
tobacco products.
Sec. 275.201 Duration of permit.
(a) Permits other than temporary permits issued under paragraph (b)
of this section will be valid for a period of three years from the
effective date shown on the permit, ATF F 5200.24.
(b) Temporary permits will be issued for a one-year period to those
applicants described in Sec. 275.192.
Sec. 275.202 Renewal of permit.
Importers wishing to continue operations beyond the expiration of
their current permit must renew their permit by making application
within 30 days of such expiration on ATF F 5200.24, in accordance with
instructions for the form. The expiring permit will continue in effect
until final action is taken by ATF on the application for renewal,
provided a timely application for renewal is filed.
Sec. 275.203 Retention of permit and supporting documents.
The importer must retain the permit, together with the copy of the
application and supporting documents returned with the permit, at the
same place where the records required by this part are kept. The permit
and supporting documents must be made available for inspection by any
appropriate ATF officer upon request.
Required Records and Reports
Sec. 275.204 General.
Every tobacco products importer must keep such records and, when
required by this part, submit such reports, of the physical receipt and
disposition of tobacco products. Records and reports will not be
required under this part with respect to tobacco products while in
customs custody.
Sec. 275.205 Recordkeeping requirements.
Any owner, importer, consignee, or their agent who imports, or
knowingly causes to be imported, any tobacco product or cigarette
papers or tubes must make and keep records. A person purchasing a
tobacco product from the importer in a domestic transaction and who
does not knowingly cause merchandise to be imported is not required to
make and keep records unless:
(a) The terms and conditions of the importation are controlled by
the person placing the order with the importer (e.g., the importer is
not an independent contractor but the agent of the person placing the
order).
(b) The tobacco products purchased from the importer include more
than 60,000 cigarettes, in which case the importer and the person
placing the order with the importer must keep the records required by
27 CFR Part 296, Subpart F, Distribution of Cigarettes. Dividing a
single shipment of more than 60,000 cigarettes into smaller components
of 60,000 cigarettes or less does not exempt any person from the
recordkeeping requirements of this subpart.
Filing and Retention of Records and Reports
Sec. 275.206 Reports.
(a) Importers must file a monthly report on ATF F 5220.6 in
accordance with the format and instructions for the form.
(b) The first report(s) must be submitted by the 15th day of the
month following the month in which the permit is issued; all previous
months beginning January 1, 2000, must also be reported at that time.
For example:
An importer who is issued a permit with a date of August 17,
2000, would be required to submit by September 15, 2000, a total of
eight reports for the months January-August, 2000.
(c) Reports with the notation ``No Activity'' must be made for
those months in which no activity occurs.
(d) When a transfer of ownership of the business of an importer of
tobacco products described in Sec. 275.224, or when a change in control
of a corporation described in Sec. 275.226 occurs, a concluding report
with the notation ``Concluding Report'' must be made for the month or
partial month during which the transfer of ownership or change in
control becomes effective.
Sec. 275.207 Filing.
All records and reports required by this part will be maintained
separately, chronologically by transaction or reporting date, at the
importer's place of business. The appropriate ATF officer may, pursuant
to an application, authorize files, or an individual file, to be
maintained at another business location under the control of the
importer, if the alternative location does not cause undue
inconvenience to ATF or Customs officers desiring to examine the files
or delay in the timely transmittal of any documents required to be
submitted.
[[Page 71953]]
Sec. 275.208 Retention.
(a) All records and reports required by this part, documents or
copies of documents supporting these records or reports, and file
copies of reports required by this part to be submitted to ATF must be
retained for not less than three years following the close of the
calendar year in which filed or made, and during this period must be
available for inspection and copying by ATF during business hours.
(b) Furthermore, the appropriate ATF officer may require these
records to be kept for an additional period of not more than three
years in any case where it is determined that such record retention is
necessary to protect the revenue. Any records, or copies thereof,
containing any of the information required by this part to be prepared,
wherever kept, must also be made available for inspection and copying.
Par. 28. Subpart L is added to read as follows:
Subpart L--Changes After Original Qualification of Importers
Changes in Name
Sec.
275.220 Change in individual name.
275.221 Change in trade name.
275.222 Change in corporate name.
Changes in Ownership and Control
275.223 Fiduciary successor.
275.224 Transfer of ownership.
275.225 Change in officers, directors, or stockholders of a
corporation.
275.226 Change in control of a corporation.
Changes in Location or Address
275.227 Change in location.
275.228 Change in address.
Subpart L--Changes After Original Qualification of Importers
Changes in Name
Sec. 275.220 Change in individual name.
Where there is a change in the name of an individual operating as
an importer of tobacco products, the importer must make application on
ATF Form 5230.5 for an amended permit within 30 days of such change.
Sec. 275.221 Change in trade name.
Where there is a change in, or an addition or discontinuance of, a
trade name used by an importer of tobacco products in connection with
operations authorized by the permit, the importer must make application
on ATF Form 5230.5 for an amended permit to reflect such change within
30 days of such change. The importer must also furnish a true copy of
any new trade name certificate or document issued to the business, or
statement in lieu thereof, required by Sec. 275.195.
Sec. 275.222 Change in corporate name.
Where there is a change in the corporate name of an importer of
tobacco products, the importer must make application on ATF Form 5230.5
for an amended permit within 30 days of such change. The importer must
also furnish such documents as may be necessary to establish that the
corporate name has been changed.
Changes in Ownership and Control
Sec. 275.223 Fiduciary successor.
If an administrator, executor, receiver, trustee, assignee, or
other fiduciary, is to take over the business of an importer of tobacco
products, as a continuing operation, such fiduciary must make
application for permit, before commencing operations as required by
subpart K of this part, furnish certified copies, in duplicate, of the
order of the court, or other pertinent documents, showing his
appointment and qualification as such fiduciary. However, where a
fiduciary intends only to liquidate the business, qualification as an
importer of tobacco products will not be required if the fiduciary
promptly files with the appropriate ATF officer a written statement to
that effect.
Sec. 275.224 Transfer of ownership.
If a transfer is to be made in ownership of the business of an
importer of tobacco products (including a change of any member of a
partnership or association), such importer must give notice, in
writing, to the appropriate ATF officer, naming the proposed successor
and the desired effective date of such transfer. The proposed successor
must qualify as an importer of tobacco products, before commencing
operations, in accordance with the applicable provisions of subpart K
of this part. The importer must give such notice of transfer, and the
proposed successor must make application for permit in ample time for
examination and approval thereof before the desired date of such
change. The predecessor must make a concluding report, in accordance
with the provisions of Sec. 275.205, and surrender the permit with such
report. The successor must make a commencing report, in accordance with
the provisions of Sec. 275.206.
Sec. 275.225 Change in officers, directors, or stockholders of a
corporation.
Upon election or appointment (excluding successive reelection or
reappointment) of any officer or director of a corporation operating
the business of an importer of tobacco products, or upon any occurrence
which results in a person acquiring ownership or control of more than
ten percent in aggregate of the outstanding stock of such corporation,
the importer must, within 30 days of such action, so notify the
appropriate ATF officer in writing, giving the identity of such person.
In the event that the acquisition of ten or more percent in aggregate
of the outstanding stock of such corporation results in a change of
control of such corporation, the provisions of Sec. 275.226 will apply.
When there is any change in the authority furnished under Sec. 275.196
for officers to act on behalf of the corporation the importer must
immediately so notify the appropriate ATF officer in writing.
[[Page 71954]]
Sec. 275.226 Change in control of a corporation.
Where the issuance, sale, or transfer of the stock of a corporation
operating as an importer of tobacco products results in a change in the
identity of the principal stockholders exercising actual or legal
control of the operations of the corporation, the corporate importer
must make application on ATF Form 5230.4 for a new permit within 30
days after the change occurs. Otherwise, the present permit will be
automatically terminated at the expiration of such 30-day period, and
the importer will dispose of all tobacco products on hand, in
accordance with this part, make a concluding report, in accordance with
the provisions of Sec. 275.206, and surrender his permit with such
report. If the application for a new permit is timely made, the present
permit will continue in effect pending final action with respect to
such application.
Changes in Location or Address
Sec. 275.227 Change in location.
Whenever an importer of tobacco products intends to relocate the
principal business office, the importer must, before commencing
operations at the new location, make application on ATF Form 5230.5
for, and obtain, an amended permit.
Sec. 275. 228 Change in address.
Whenever any change occurs in the address, but not the location, of
the principal business office of an importer of tobacco products, as a
result of action of local authorities, the importer must make
application on ATF Form 5230.5 for an amended permit within 30 days of
such change.
Signed: November 18, 1999.
John W. Magaw,
Director.
Approved: December 7, 1999.
Dennis M. O'Connell,
Acting Deputy Assistant Secretary (Regulatory, Tariff and Trade
Enforcement).
[FR Doc. 99-32600 Filed 12-21-99; 8:45 am]
BILLING CODE 4810-31-P
