1513-0103 Laws and Regs.

1513-0103

26 U.S.C.

Sec. 5711. Bond

(a) When required

Every person, before commencing business as a manufacturer of

tobacco products or cigarette papers and tubes, or as an export

warehouse proprietor, shall file such bond, conditioned upon compliance

with this chapter and regulations issued thereunder, in such form,

amount, and manner as the Secretary shall by regulation prescribe. A new

or additional bond may be required whenever the Secretary considers such

action necessary for the protection of the revenue.

(b) Approval or disapproval

No person shall engage in such business until he receives notice of

approval of such bond. A bond may be disapproved, upon notice to the

principal on the bond, if the Secretary determines that the bond is not

adequate to protect the revenue.

(c) Cancellation

Any bond filed hereunder may be canceled, upon notice to the

principal on the bond, whenever the Secretary determines that the bond

no longer adequately protects the revenue.

(Aug. 16, 1954, ch. 736, 68A Stat. 711; Pub. L. 85-859, title II,

Sec. 202, Sept. 2, 1958, 72 Stat. 1421; Pub. L. 89-44, title V,

Sec. 502(b)(6), June 21, 1965, 79 Stat. 151; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

Sec. 7101. Form of bonds

Whenever, pursuant to the provisions of this title (other than

section 7485), or rules or regulations prescribed under authority of

this title, a person is required to furnish a bond or security--

(1) General rule

Such bond or security shall be in such form and with such surety

or sureties as may be prescribed by regulations issued by the

Secretary.

(2) United States bonds and notes in lieu of surety bonds

The person required to furnish such bond or security may, in

lieu thereof, deposit bonds or notes of the United States as

provided in section 9303 of title 31, United States Code.

(Aug. 16, 1954, ch. 736, 68A Stat. 847; Pub. L. 92-310, title II,

Sec. 230(b), June 6, 1972, 86 Stat. 209; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97-258,

Sec. 3(f)(11), Sept. 13, 1982, 96 Stat. 1065.)

27 CFR

Sec. 40.66 Bond.

Every person, before commencing business as a manufacturer of

tobacco products, shall file, in connection with his application for

permit, a bond on Form 3070, in duplicate, in accordance with the

applicable provisions of subpart G of this part, conditioned upon

compliance with the provisions of chapter 52, I.R.C., and regulations

thereunder, including, but not limited to, the timely payment of taxes

imposed by such chapter and penalties and interest in connection

therewith for which he may become liable to the United States: Provided, That any person who, on the effective date of this part, October 1, 1961, has on file a valid and adequate bond, Form 2100, ``Bond--Manufacturer of Cigars and Cigarettes,'' may continue, under such bond, the operations with respect to the permit to which that bond relates, in accordance with the provisions of this part.

(72 Stat. 1421, as amended; 26 U.S.C. 5711)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr.

15, 1975]

Sec. 40.67 Blanket bond.

Where a manufacturer of tobacco products operates more than one

factory in the same region he may, in lieu of filing separate bonds,

file a blanket bond on Form 3070, in duplicate, in accordance with the

provisions of Sec. 40.134, for any or all of the factories in the same

region. The total amount of any blanket bond given under this section

shall be available for the satisfaction of any liability incurred at any factory covered by the bond.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.131 Corporate surety.

(a) Surety bonds required under the provisions of this part may be

given only with corporate sureties holding certificates of authority

from the Secretary of the Treasury as acceptable sureties on Federal

bonds. Each bond and each extension of coverage of bond shall at the

time of filing be accompanied by a power of attorney authorizing the

agent or officer who executed the bond to so act on behalf of the

surety. The appropriate TTB officer who is authorized to approve the

bond may, whenever he deems it necessary, require additional evidence of the authority of the agent or officer to execute the bond or extension of coverage of bond. The power of attorney shall be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed document it shall be accompanied by a certificate of its validity. Limitations concerning corporate sureties are prescribed by the Secretary in Treasury Department Circular No. 570, as revised. The surety shall have no interest whatever in the business covered by the bond.

(b) Treasury Department Circular No. 570 (Companies Holding

Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies) is published in the Federal Register annually as of the first workday in July. As they occur, interim revisions of the circular are published in the Federal Register. Copies may be obtained from the Audit Staff, Bureau of Government Financial Operations, Department of the Treasury, Washington, DC 20226.

(61 Stat. 649, 72 Stat. 1421, as amended; 31 U.S.C. 9304, 9306; 26

U.S.C. 5711; 5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. 6961, 33 FR 9488, June 28, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975 and amended by T.D. ATF-92, 46 FR 46921, Sept. 23, 1981]

Sec. 40.132 Deposit of securities in lieu of corporate surety.

In lieu of corporate surety the manufacturer of tobacco products may pledge and deposit, as security for his bond, securities which are

transferable and are guaranteed as to both interest and principal by the United States, in accordance with the provisions of 31 CFR part 225.

(61 Stat. 650, 72 Stat. 1421; 6 U.S.C.9301, 9303; 26 U.S.C. 5711)

Sec. 40.133 Amount of individual bond.

The amount of the bond of a manufacturer of tobacco products shall

be not less than the total amount of tax liability on all tobacco

products manufactured in his factory, received in bond from other

factories and from export warehouses, and released to him in bond from

customs custody, during any calendar month. Where the amount of any bond is no longer sufficient and the bond is in less than the maximum amount, the manufacturer shall immediately file a strengthening or superseding bond as required by this subpart. The amount of any such bond (or the total amount including strengthening bonds, if any) need not exceed $250,000 for a manufacturer producing or receiving cigarettes in bond; need not exceed $150,000 for a manufacturer producing or receiving cigars, smokeless tobacco, pipe tobacco, or roll-your-own tobacco in bond; and need not exceed $250,000 for a manufacturer producing or receiving any combination of tobacco

products in bond. The bond of a manufacturer of tobacco products shall

in no case be less than $1,000.

[T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194,

Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48839, Nov. 27, 1989;

T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]

Sec. 40.134 Amount of blanket bond.

In the case of a blanket bond filed under the provisions of Sec.

40.67, where the total amount of individual bonds otherwise required for the factories under Sec. 40.133 does not exceed $250,000, such blanket bond shall be not less than the total amount of such individual bonds. Where the total amount of such individual bonds required is in excess of $250,000 but not in excess of $500,000, the amount of the blanket bond shall be not less than $250,000 plus 50 percent of such total amount which is in excess of $250,000. Where the total amount of such individual bonds required is in excess of $500,000 the amount of the blanket bond shall be not less than $375,000 plus 25 percent of such total amount which is in excess of $500,000.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.135 Strengthening bond.

Where the amount of any bond is no longer sufficient under the

provisions of Sec. 40.133 or Sec. 40.134, the manufacturer shall

immediately file a strengthening bond in an appropriate amount with the

same surety as that on the bond already in effect, unless a superseding

bond is filed pursuant to Sec. 40.136. Strengthening bonds will not be

approved where any notation is made thereon which is intended, or which

may be construed, as a release of any former bond, or as limiting the

amount of either bond to less than its full amount.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.136 Superseding bond.

A manufacturer of tobacco products shall immediately file a new bond to supersede his current bond when

(a) The corporate surety on the current bond becomes insolvent,

(b) The appropriate TTB officer approves a request from the surety

on the current bond to terminate his liability under the bond,

(c) Payment of any liability under a bond is made by the surety

thereon,

(d) The amount of the bond is no longer sufficient under the

provisions of Sec. 40.133 or Sec. 40.134 and a strengthening bond has

not been filed, or

(e) The appropriate TTB officer considers such a superseding bond

necessary for the protection of the revenue.

Where a bond is not filed as required under the provisions of this

section the manufacturer shall discontinue forthwith the operations to

which such bond relates.

(72 Stat. 1421: 26 U.S.C. 5711)

Sec. 40.137 Extension of coverage of bond.

An extension of coverage of bond shall be manifested on Form 2105 by the manufacturer of tobacco products and by the surety on the bond with the same formality and proof of authority as required for the execution of the bond.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.138 Approval of bond and extension of coverage of bond.

No person shall commence operations under any bond, nor extend his

operations, until he receives from the appropriate TTB officer notice of his approval of the bond or of an appropriate extension of coverage of the bond required under this part.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.139 Termination of bond.

Any bond required by this part may be terminated by the appropriate

TTB officer as to liability for future operations (a) pursuant to

application by the surety as provided in the bond, (b) on approval of a superseding bond, or (c) when operations by the manufacturer are permanently discontinued in accordance with subpart J. After a bond is terminated the surety shall remain bound with respect to any liability for unpaid taxes, penalties, and interest, not in excess of the amount of the bond, incurred by the manufacturer prior to the termination date.

(72 Stat. 1421; 26 U.S.C. 5711)

[T.D. 6840, 30 FR 9311, July 27, 1965. Redesignated at 40 FR 16835, Apr. 15, 1975]

Sec. 40.140 Release of pledged securities.

Securities of the United States pledged and deposited as provided in Sec. 40.132 shall be released only in accordance with the provisions of 31 CFR part 225. Such securities will not be released by the appropriate TTB officer until liability under the bond for which they were pledged has been terminated. When the appropriate TTB officer is satisfied that they may be released, he shall fix the date or dates on which a part or all of such securities may be released. At any time prior to the release of such securities, the appropriate TTB officer may extend the date of release for such additional length of time as he deems necessary.

(61 Stat. 650, 72 Stat. 1421; 31 U.S.C. 9301, 9303, 26 U.S.C. 5711)

Sec. 40.392 Bond.

Every person, before commencing business as a manufacturer of

cigarette papers and tubes, shall file a bond on TTB Form 2102 (5210.1). Such bond shall be filed in accordance with the applicable provisions of subpart G of this part and conditioned upon compliance with the provisions of 26 U.S.C. Chapter 52, and regulations thereunder, including, but not limited to, the timely payment of taxes imposed by such chapter and penalties and interest in connection therewith for which the manufacturer may become liable to the United States.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.401 Corporate surety.

(a) Surety bonds required by this subpart may be given only with

corporate sureties holding certificates of authority from, and subject

to any limitations prescribed by the Secretary of the Treasury as set

forth in the current revision of Treasury Department Circular No. 570

(Companies Holding Certificates of Authority as Acceptable Sureties on

Federal Bonds and as Acceptable Reinsuring Companies). The surety shall

have no interest whatever in the business covered by the bond.

(b) Each bond and each extension of coverage of bond shall at the

time of filing be accompanied by a power of attorney authorizing the

agent or officer who executed the bond to so act on behalf of the

surety. The appropriate TTB officer who is authorized to approve the

bond may, whenever deemed necessary, require additional evidence of the

authority of the agent or officer to execute the bond or extension of

coverage of bond. The power of attorney shall be prepared on a form

provided by the surety company and executed under the corporate seal of

the company. If the power of attorney submitted is other than a manually signed document, it shall be accompanied by a certificate of its validity.

(c) Treasury Department Circular No. 570 is published in the Federal Register annually as of the first workday in July. As they occur, interim revisions of the circular are published in the Federal Register. Copies may be obtained from the Surety Bond Branch,

Financial Management Service, Department of the Treasury, Washington,

D.C. 20220.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (31 U.S.C. 9304,

9306); sec. 202. Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C.

5711))

Sec. 40.402 Two or more corporate sureties.

A bond executed by two or more corporate sureties shall be the joint and several liability of the principal and the sureties. However, each corporate surety may limit its liability in terms upon the face of the bond in a definite, specific amount, which amount shall not exceed the limitations prescribed for such corporate surety by the Secretary, as set forth in the current revision of Treasury Department Circular 570 (Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies). (See Sec.

40.401(c)) When the sureties so limit their liability, the aggregate of

such limited liabilities must equal the required amount of the bond.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (31 U.S.C. 9304,

9306); sec. 202. Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C.

5711))

Sec. 40.403 Deposit of securities in lieu of corporate surety.

In lieu of corporate surety, the manufacturer of cigarette papers

and tubes may pledge and deposit, as security for the bond, securities

which are transferable and are guaranteed as to both interest and

principal by the United States, in accordance with the provisions of 31

CFR Part 225--Acceptance of Bonds, Notes or Other Obligations Issued or

Guaranteed by the United States as Security in Lieu of Surety or

Sureties on Penal Bonds.

(61 Stat. 650, 72 Stat. 1421, 31 U.S.C. 9301, 9303, 26 U.S.C. 5711, 5

U.S.C. 552(a) (80 Stat. 383, as amended))

Sec. 40.404 Amount of bond.

The amount of the bond of a manufacturer of cigarette papers and

tubes shall be not less than the maximum amount of the tax liability on

the cigarette papers and tubes manufactured in the factory, received

without payment of tax from other factories, and released without

payment of tax from customs custody as provided in Sec. 40.452, during

any month. In the case of a manufacturer commencing business, the

production, receipts from other factories, and releases from customs

custody, without payment of tax, shall be estimated for the purpose of

this section. The amount of any such bond (or the total amount where

strengthening bonds are filed) shall not exceed $20,000, nor be less

than $1,000.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.405 Strengthening bond.

Where the appropriate TTB officer determines that the amount of the

bond, under which a manufacturer of cigarette papers and tubes is

currently carrying on such business, no longer adequately protects the

revenue, the appropriate TTB officer may require the manufacturer to

file a strengthening bond in an appropriate amount with the same surety

as that on the bond already in effect, in lieu of a superseding bond to

cover the full liability on the basis of Sec. 40.404. The appropriate

TTB officer shall refuse to approve any strengthening bond where any

notation is made thereon which is intended or which may be construed as

a release of any former bond, or as limiting the amount of either bond

to less than its full amount.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.406 Superseding bond.

A manufacturer of cigarette papers and tubes shall file a new bond

to supersede the current bond immediately when:

(a) The corporate surety on the current bond becomes insolvent,

(b) The appropriate TTB officer approves a request from the surety

of the current bond to terminate liability under the bond,

(c) Payment of any liability under a bond is made by the surety

thereon, or

(d) The appropriate TTB officer considers such a superseding bond

necessary for the protection of the revenue.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.407 Extension of coverage of bond.

An extension of the coverage of bond filed under this subpart shall

be manifested on TTB Form 2105 (5000.7), Extension of Coverage of Bond,

by the manufacturer of cigarette papers and tubes and by the surety on

the bond with the same formality and proof of authority as required for

the execution of the bond.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.408 Approval of bond and extension of coverage of bond.

No person shall commence operations under any bond, nor extend

operations, until such person receives from the appropriate TTB officer

notice of approval of the bond or an appropriate extension of coverage

of the bond required under this subpart. Upon receipt of an approved

bond or extension of coverage of bond from the appropriate TTB officer,

such bond or extension of coverage of bond shall be retained by the

manufacturer of cigarette papers and tubes in factory and shall be made

available for inspection by any TTB officer upon request.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.409 Termination of liability of surety under bond.

The liability of a surety on any bond required by this subpart shall be terminated only as to operations on and after the effective date of a superseding bond, or the date of approval of the discontinuance of operations by the manufacturer of cigarette papers and tubes, or otherwise in accordance with the termination provisions of the bond. The surety shall remain bound in respect of any liability for unpaid taxes, penalties and interest, not in excess of the amount of the bond, incurred by the manufacturer while the bond is in force.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 40.410 Release of pledged securities.

Securities of the United States pledged and deposited as provided in Sec. 40.403 shall be released only in accordance with the provisions of 31 CFR part 225. Such securities will not be released by the appropriate TTB officer until liability under the bond for which they were pledged has been terminated. When the appropriate TTB officer is satisfied that they may be released, the appropriate TTB officer shall fix the date or dates on which a part or all of such securities may be released. At any time prior to the release of such securities, the appropriate TTB officer may extend the date of release for such additional length of time as is deemed necessary.

(61 Stat. 650, 72 Stat. 1421; 31 U.S.C. 9301, 9303; 26 U.S.C. 5711)

Sec. 44.86 Bond.

Every person, before commencing business as an export warehouse

proprietor, shall file, in connection with his application for permit, a bond, Form 2103 (5220.5), in accordance with the applicable provisions of Sec. 44.88 and subpart F, conditioned upon compliance with the provisions of chapter 52, I.R.C., and regulations thereunder, including, but not limited to, the timely payment of taxes imposed by such chapter and penalties and interest in connection therewith for which he may become liable to the United States.

(72 Stat. 1421; 26 U.S.C. 5711)

[25 FR 4716, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975,

as amended by T.D. ATF-480, 67 FR 30801, May 8, 2002]

Sec. 44.121 Corporate surety.

Source: 25 FR 4718, May 28, 1960, unless otherwise noted.

Redesignated at 40 FR 16835, Apr. 15, 1975.

(a) Surety bonds required under the provisions of this part may be

given only with corporate sureties holding certificates of authority

from the Secretary of the Treasury as acceptable sureties on Federal

bonds. Limitations concerning corporate sureties are prescribed by the

Secretary in Treasury Department Circular No. 570, as revised (see

paragraph (c) of this section). The surety shall have no interest

whatever in the business covered by the bond.

(b) Each bond and each extension of coverage of bond shall at the

time of filing be accompanied by a power of attorney authorizing the

agent or officer who executed the bond to so act on behalf of the

surety. The appropriate TTB officer who is authorized to approve the

bond may, whenever he deems it necessary, require additional evidence of the authority of the agent or officer to execute the bond or extension of coverage of bond. The power of attorney shall be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed document, it shall be accompanied by a certificate of its validity.

(c) Treasury Department Circular No. 570 (Companies Holding

Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies) is published in the Federal Register annually as of the first workday in July. As they occur, interim revisions of the circular are published in the Federal Register. Copies may be obtained from the Audit Staff, Bureau of Government Financial Operations, Department of the Treasury, Washington, DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7); sec.

202, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5711))

[T.D. ATF-92, 46 FR 46923, Sept. 23, 1981]

Sec. 44.122 Deposits of bonds, notes, or obligations in lieu of corporate surety.

Bonds or notes of the United States, or other obligations which are

unconditionally guaranteed as to both interest and principal by the

United States, may be pledged and deposited by the export warehouse

proprietor as security in connection with bond to cover his operations,

in lieu of the corporate surety, in accordance with the provisions of

Treasury Department Circular No. 154, revised (31 CFR part 225). Such

bonds or notes which are nontransferable, or the pledging of which will

not be recognized by the Treasury Department, are not acceptable as

security in lieu of corporate surety.

(72 Stat. 1421, 61 Stat. 650; 26 U.S.C. 5711, 6 U.S.C. 15)

Sec. 44.123 Amount of bond.

The amount of the bond filed by the export warehouse proprietor, as

required by Sec. 44.86, shall be not less than the estimated amount of

tax which may at any time constitute a charge against the bond:

Provided, That the amount of any such bond (or the total amount where

original and strengthening bonds are filed) shall not exceed $200,000

nor be less than $1,000. The charge against such bond shall be subject

to increase upon receipt of tobacco products, and cigarette papers and

tubes into the export warehouse and to decrease as satisfactory evidence of exportation, or satisfactory evidence of such other disposition as may be used as the lawful basis for crediting such bond, is received by the appropriate TTB officer with respect to such articles transferred or removed. When the limit of liability under a bond given in less than the maximum amount has been reached, no additional shipments shall be received into the warehouse until a strengthening or superseding bond is filed, as required by Sec. 44.124 or Sec. 44.125.

(72 Stat. 1421, as amended; 26 U.S.C. 5711)

[T.D. 6871, 31 FR 50, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr.

15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D.

ATF-243, 51 FR 43194, Dec. 1, 1986]

Sec. 44.124 Strengthening bond.

Where the appropriate TTB officer determines that the amount of the

bond, under which an export warehouse proprietor is currently carrying

on business, no longer adequately protects the revenue, and such bond is in an amount of less than $200,000, the appropriate TTB officer may

require the proprietor to file a strengthening bond in an appropriate

amount with the same surety as that on the bond already in effect, in

lieu of a superseding bond to cover the full liability on the basis of

Sec. 44.123. The appropriate TTB officer shall refuse to approve any

strengthening bond where any notation is made thereon which is intended

or which may be construed as a release of any former bond, or as

limiting the amount of either bond to less than its full amount.

(72 Stat. 1421; 26 U.S.C. 5711)

[25 FR 4718, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975,

as amended by T.D. ATF-480, 67 FR 30802, May 8, 2002.

Sec. 44.125 Superseding bond.

An export warehouse proprietor shall file a new bond to supersede

his current bond, immediately when (a) the corporate surety on the

current bond becomes insolvent, (b) the appropriate TTB officer approves a request from the surety on the current bond to terminate his liability under the bond, (c) payment of any liability under a bond is made by the surety thereon, or (d) the appropriate TTB officer considers such a superseding bond necessary for the protection of the revenue.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 44.126 Extension of coverage of bond.

An extension of the coverage of any bond filed under this part shall be manifested on Form 2105 (5000.7) by the export warehouse proprietor and by the surety on the bond with the same formality and proof of authority as required for the execution of the bond.

(72 Stat. 1421; 26 U.S.C. 5711)

[25 FR 4718, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975,

as amended by T.D. ATF-480, 67 FR 30802, May 8, 2002.

Sec. 44.127 Approval of bond and extension of coverage of bond.

No person shall commence operations under any bond, nor extend his

operations, until he receives from the appropriate TTB officer notice of his approval of the bond or of an appropriate extension of coverage of the bond required under this part.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 44.128 Termination of liability of surety under bond.

The liability of a surety on any bond required by this part shall be terminated only as to operations on and after the effective date of a superseding bond, or the date of approval of the discontinuance of operations by the export warehouse proprietor, or otherwise in accordance with the termination provisions of the bond. The surety shall remain bound in respect of any liability for unpaid taxes, penalties, and interest, not in excess of the amount of the bond, incurred by the proprietor while the bond is in force.

(72 Stat. 1421; 26 U.S.C. 5711)

Sec. 44.129 Release of bonds, notes, and obligations.

(a) Bonds, notes, and other obligations of the United States,

pledged and deposited as security in connection with bonds required by

this part, shall be released only in accordance with the provisions of

Treasury Department Circular No. 154 (31 CFR Part 225--Acceptance of

Bonds, Notes or Other Obligations Issued or Guaranteed by the United

States as Security in Lieu of Surety or Sureties on Penal Bonds). When

the appropriate TTB officer is satisfied that it is no longer necessary

to hold such security, he shall fix the date or dates on which a part or all of such security may be released. At any time prior to the release of such security, the appropriate TTB officer may, for proper cause, extend the date of release of such security for such additional length of time as in his judgment may be appropriate.

(b) Treasury Department Circular No. 154 is periodically revised and contains the provisions of 31 CFR part 225 and the forms prescribed in 31 CFR part 225. Copies of the circular may be obtained from the Audit Staff, Bureau of Government Financial Operations, Department of the Treasury, Washington, DC 20226.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1421 (26 U.S.C. 5711); July 30,

1947, ch. 390, 61 Stat. 650 (6 U.S.C. 15))

[T.D. ATF-92, 46 FR 46923, Sept. 23, 1981; 46 FR 48644, Oct. 2, 1981]

Sec. 70.432 Qualification and bonding requirements.

(a) Manufacturers of tobacco products and proprietors of export

warehouses. Every person, before commencing business as a manufacturer

of tobacco products or as a proprietor of an export warehouse, is

required to qualify with the Alcohol and Tobacco Tax and Trade Bureau by making application for a permit and filing bond and other required

documents and obtaining a permit.

(b) Manufacturers of cigarette papers and tubes. Every person,

before commencing business as a manufacturer of cigarette papers and

tubes, is required to qualify with the Alcohol and Tobacco Tax and Trade Bureau by filing bond and other required documents.

(c) Puerto Rican manufacturers of tobacco products. Every

manufacturer of tobacco products in Puerto Rico who desires to defer

payment in Puerto Rico of the internal revenue tax imposed by section

7652(a) of the Internal Revenue Code on tobacco products of Puerto Rican manufacture coming into the United States must file a bond with the appropriate TTB officer. Such bond is conditioned on the principal's paying, at the time and in the manner prescribed in the regulations, the full amount of tax computed on the tobacco products which are released for shipment to the United States. No bond is required if the tax is prepaid.

(d) Proprietors of customs warehouses. Every proprietor of a customs bonded manufacturing warehouse, Class 6, who desires to remove under part 44 tax-exempt cigars for exportation (including supplies for

vessels and aircraft), or for delivery for subsequent exportation, is

required to file a bond. However, removal of cigars for sale or

consumption in the United States is subject to customs regulations.

(e) Drawback of tax. Taxpaid tobacco products, and cigarette papers

and tubes may be exported with benefit of drawback of tax. Drawback may

be allowed only to the person who paid the tax on such articles and who

files a claim and otherwise complies with the provisions contained in

the applicable regulations referred to in Sec. 70.431. As a condition

precedent to the allowance of any drawback claim, the claimant is

required to file a bond in an amount not less than the amount of tax

covered in the claim.

(f) General. Detailed information relating to the qualification and

bonding requirements, including the forms to be used and the procedure

to be followed, is fully set forth in the regulations referred to in

Sec. 70.431.

[T.D. ATF-251, 52 FR 19325, May 22, 1987. Redesignated and amended by

T.D. ATF-301, 55 FR 47606, 47654, Nov. 14, 1990; T.D. ATF-450, 66 FR

29029, May 29, 2001; T.D. ATF-464, 66 FR 43480, Aug. 20, 2001]