Distilled spirits or alcohol for industrial use (including alcohol for fuel use)
- Document symbol
- G/LIC/N/3/USA/21
- Original language
- English
- Published on
- 16/10/2024
Outline of Systems
Q1. Give a brief description of each licensing system as a whole and, with respect to each, reply to the following questions as relevant, placing all of the material with respect to a given system in sequence together, and using cross references as appropriate when elements which have already been described are also present in another system.
The Internal Revenue Code of 1986 requires that producers of distilled spirits or alcohol for industrial purposes have permits. If distributors or users want to obtain industrial spirits or alcohol without paying the excise tax under 26 U.S.C. 5001 (https://www.govinfo.gov/app/details/USCODE-2023-title26/USCODE-2023-title26-subtitleE-chap51-subchapA-partI-subpartA-sec5001then they must apply for a permit. Industrial alcohol is exempt from taxation if used as authorized by law. The permit system is a means to control these authorized uses.
Purposes and Coverage of Licensing
Q2. Identify each licensing system maintained and state what products, appropriately grouped, are covered.
A permit for the importation of alcohol for industrial use may be required. Alcohol or distilled spirits as defined in 26 U.S.C. 5002(a) (https://www.govinfo.gov/app/details/USCODE-2023-title26/USCODE-2023-title26-subtitleE-chap51-subchapA-partI-subpartA-sec5002) includes denatured spirits. Such alcohol may only be received into this country by an authorized distilled spirits plant (under a registration or operating permit) that holds a sufficient bond under the Internal Revenue Code unless the spirits are tax-paid upon importation.
Q3. The system applies to goods originating in and coming from which countries?
All countries.
Q4. Is the licensing intended to restrict the quantity or value of imports, and if not, what are its purposes? Have alternative methods of accomplishing the purposes been considered and if so which? Why have they not been adopted?
No. The purpose is to prevent tax fraud.
Q5. Cite the law, regulation and/or administrative order under which the licensing is maintained. Is the licensing statutorily required? Does the legislation leave designation of products to be subjected to licensing to administrative discretion? Is it possible for the government (or the executive branch) to abolish the system without legislative approval?
Please see: 26 U.S.C. 5171 (https://www.govinfo.gov/app/details/USCODE-2023-title26/USCODE-2023-title26-subtitleE-chap51-subchapB-sec5171), 26 U.S.C. 5181 (https://www.govinfo.gov/app/details/USCODE-2023-title26/USCODE-2023-title26-subtitleE-chap51-subchapB-sec5181), 27 CFR Part 19 (https://www.govinfo.gov/app/details/CFR-2024-title27-vol1/CFR-2024-title27-vol1-part19). The licensing system was created by statute and may not be abolished without legislative action. The designation of products requiring a license is not subject to administrative discretion.
Procedures
Q6. For products under restriction as to the quantity or value of imports (whether applicable globally or to a limited number of countries or whether established bilaterally or unilaterally):
Q6.I. Is information published, and where, concerning allocation of quotas and formalities of filing applications for licences? If not, how is it brought to the attention of possible importers? Of governments and export promotion bodies of exporting countries and their trade representatives? Is the overall amount published? The amount allocated to goods from each country? The maximum amount allocated to each importer? How to request any exceptions or derogations from the licensing requirement?
Q6.II. How is the size of the quotas determined: on a yearly, six-monthly or quarterly basis? Are there cases where the size of quota is determined on a yearly basis but licences are issued for imports on a six-monthly or quarterly basis? In the latter case, is it necessary for importers to apply for fresh licence on a six-monthly or quarterly basis?
Q6.III. Are licences allotted for certain goods partly or only to domestic producers of like goods? What steps are taken to ensure that licences allocated are actually used for imports? Are unused allocations added to quotas for a succeeding period? Are the names of importers to whom licences have been allocated made known to governments and export promotion bodies of exporting countries upon request? If not, for what reason? (Indicate products to which replies relate.)
Q6.IV. From the time of announcing the opening of quotas, as indicated in I above, what is the period of time allowed for the submission of applications for licences?
Q6.V. What are the minimum and maximum lengths of time for processing applications?
Q6.VI. How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?
Q6.VII. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Q6.VIII. If the demand for licences cannot be fully satisfied, on what basis is the allocation to applicants made? First come, first served? Past performance? Is there a maximum amount to be allocated per applicant and, if so, on what basis is it determined? What provision is made for new importers? Are applications examined simultaneously or on receipt?
Q6.IX. In the case of bilateral quotas or export restraint arrangements where export permits are issued by exporting countries, are import licences also required? If so, are licences issued automatically?
Q6.X. In cases where imports are allowed on the basis of export permits only, how is the importing country informed of the effect given by the exporting countries to the understanding between the two countries?
Q6.XI. Are there products for which licences are issued on condition that goods should be exported and not sold in the domestic market?
Q7. Where there is no quantitative limit on importation of a product or on imports from a particular country:
Q7.a. How far in advance of importation must application for a licence be made? Can licences be obtained within a shorter time-limit or for goods arriving at the port without a licence (for example, owing to inadvertency)?
Registrations or operating permits under the Internal Revenue Code are usually issued within six to eight months after the application has been filed. Under certain circumstances, a permit can be obtained within a shorter time frame.
Q7.b. Can a licence be granted immediately on request?
Under certain circumstances, a permit can be obtained within a shorter time frame.
Q7.c. Are there any limitations as to the period of the year during which application for licence and/or importation may be made? If so, explain.
No.
Q7.d. Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?
Yes. TTB is the only agency with whom an importer of distilled spirits or alcohol for industrial use (including alcohol for fuel use) must deal to secure this permit.
Q8. Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria? Are the reasons for any refusal given to the applicant? Have applicants a right of appeal in the event of refusal to issue a licence and, if so, to what bodies and under what procedures?
The circumstances for denying an application for a permit are stated in 26 U.S.C. 5271 (https://www.govinfo.gov/app/details/USCODE-2023-title26/USCODE-2023-title26-subtitleE-chap51-subchapD-sec5271). The reasons for any refusal are given to the applicant in writing. In the event of refusal to issue an operating permit, administrative appeals may be made to TTB's Administrator, and then to a Federal court.
Eligibility of Importers to Apply for Licence
Q9. Are all persons, firms and institutions eligible to apply for licences: (If not, is there a system of registration of persons or firms permitted to engage in importation? What persons or firms are eligible? Is there a registration fee? Is there a published list of authorized importers?) a) under restrictive licensing systems? b) under non-restrictive systems?
Any person, firm, or institution may apply for a license. Individuals must be citizens or legal residents of the United States; firms or institutions must be incorporated in the United States and have the appropriate tax ID with the IRS. There are no registration fees.
Documentational and Other Requirements for Application for Licence
Q10. What information is required in applications? Submit a sample form. What documents is the importer required to supply with the application?
Application for Operating Permit - TTB Form 5110.25 (https://www.ttb.gov/images/pdfs/forms/f511025.pdf); Alcohol for fuel use - TTB Form 5110.74 (https://www.ttb.gov/images/pdfs/forms/f511074.pdf), as appropriate, along with such supporting documentation as required.
Q11. What documents are required upon actual importation?
Ordinary commercial papers.
Q12. Is there any licensing fee or administrative charge? If so, what is the amount of the fee or charge?
No.
Q13. Is there any deposit or advance payment requirement associated with the issue of licences? If so, state the amount or rate, whether it is refundable, the period of retention and the purpose of the requirement.
No.
Conditions of Licensing
Q14. What is the period of validity of a licence? Can the validity of a licence be extended? How?
Continuing, unless revoked, suspended or surrendered.
Q15. Is there any penalty for the non-utilization of a licence or a portion of a licence?
Permits are subject to revocation if not used for more than two years.
Q16. Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?
No.
Q17. Are any other conditions attached to the issue of a licence? a) for products subject to quantitative restriction? b) for products not subject to quantitative restriction?
No.
Other Procedural Requirements
Q18. Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?
No.