Comment 11
Mr. William Foster Chief Regulations and Procedures Division Alcohol and Tobacco Tax and Trade Bureau Attn: Notice 26 PO Box 14412 WASHINGTON DC 20044-4412 Dear Mr. Foster Thank you for the opportunity to make written comments on the implementation of the new certification requirements for wine imported into the United States contained in section 2002 of the Miscellaneous Trade and Technical Corrections Act of 2004 (HR1047). Australia has a substantial interest in the certification procedures introduced in the Miscellaneous Trade and Technical Corrections Act of 2004 with the United States being a major export destination for Australian wine. On 18 December 2001 Australia signed the Agreement on Mutual Acceptance of Oenological Practices (MAA). Subject to the completion of our domestic treaty approval procedures we expect to deposit our instrument of ratification with the US Department of Commerce (the depositary) by the end of February 2005. The purpose of the MAA (of which the United States is also a Party) is to facilitate trade in wine among countries that are parties to the MAA. Under the provisions of the MAA each member country will, subject to health and safety considerations, accept wine imported from another member country, regardless of whether it meets all the domestic production requirements of the importing country. I understand that the impact of the amendment to HR1047 is that the United States will require certification from the government of the producing country that the practices and procedures used to produce a wine constitute proper cellar treatment of a wine. However, the amendment also provides that where a wine is produced in accordance with practices and procedures acceptable to the United States under an international agreement this constitutes proper cellar treatment. The MAA would appear to be such an international agreement and thus Australia expects that the HR1047 regulations will exempt wines produced in MAA member countries from any certification requirements imposed by HR1047. We are advised, however, that the Alcohol and Tobacco Tax and Trade Bureau (TTB) has indicated in oral briefings that it is considering whether to require importers to meet additional certification requirements to those applying prior to 1 January 2005. That is, importers will be required to certify that wine from a country that has entered into a MAA was made in accordance with that treaty. Australia is concerned that to apply such a requirement on wine from a MAA country not only unnecessarily increases the regulatory burden on such importers, but is contradictory to the letter and spirit of the MAA itself. For
Edmund Barton Building Barton ACT
GPO Box 858 Canberra ACT 2601
ph +61 2 6272 3933
www.daff.gov.au
ABN 24 113 085 695
DEPARTMENT OF AGRICULTURE, FISHERIES AND FORESTRY
example, Article 5.4 of the MAA, specifically states that no Party shall require any other Party to provide routine certification with regard to any oenological practice except for the protection of human health and safety. It is unclear to us how any additional certification requirements for Australian wine under HR1047 would meet the obligations of the MAA. Further, wine cannot be exported from Australia without an export license. To obtain such an export licence, exporters must comply with all Australia’s international obligations, including the MAA itself. In other words, all wine exported from Australia to the United States is done in compliance with the obligations of the MAA. The MAA also requires that when a member country is considering a proposal to amend its laws, regulations or requirements relating to oenological practices it will provide other MAA Parties with the opportunity to comment on them before the amendments come into effect. By this mechanism importing countries can continue to import wine from MAA members with a full knowledge of the oenological practices used to produce them. The second issue of interest to Australia is the exception for wine that is affiliated with a domestic winery operating under a TTB base permit. The definition of affiliate includes a winery’s parent or subsidiary or any other entity in which the winery’s parent or subsidiary has an ownership interest. As you may be aware a number of Australian wine producers are owned or part owned by United States companies and a number of United States wine producers are owned or part owned by Australian companies. I would expect that implementing regulations would exempt wine produced from such a company from the requirement for certification. For example, wine produced in France or Italy by a company part owned by Hardy’s (an Australian company fully owned by Constellation) or McGuigan (an Australian wine producer in which Gallo has an interest) would be exempt from any certification requirements that a wine producer fully owned by a French or Italian company may have to meet. In conclusion, Australia believes that the MAA was negotiated to reduce certification for trade between countries that are a Party to the MAA. Accordingly, Australia expects that the HR1047 regulations will exempt wines produced in MAA member countries from any additional certification requirements imposed by HR1047. Regulations that implement HR1047 should also not require certification from wine producers that have an ownership interest in or are part owned by United States wine producers.
I thank you for the opportunity to provide comment on the implementation of HR1047 and look forward to the final implementing regulations. If you have any questions on any matter raised in these comments please contact John Power, Assistant Manager, Wine Policy on +61 2 6272 5713 or john.power@daff.gov.au. Yours Sincerely Michael Alder Manager Wine Policy 10 January 2005