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Vol. 137, No. 13 — March 29, 2003 Regulations Respecting the Information to be Displayed on Alcohol Containers and their PackagingStatutory Authority Excise Act, 2001 Sponsoring Agency Canada Customs and Revenue Agency REGULATORY IMPACT ANALYSIS STATEMENT Description The new Excise Act, 2001 (the "Act") received Royal Assent on June 13, 2002, thereby replacing the legislative provisions of the existing Excise Act, regarding the production and distribution of alcohol and tobacco products. The Act authorizes the Governor in Council to make identified related regulations in support of the new legislation. Accordingly, the Regulations Respecting the Information to be Displayed on Alcohol Containers and their Packaging have been written to detail the prescribed information that an alcohol licensee is required to display on a container of alcohol that it packages. The information prescribed by these Regulations is the name and address or the licence number of the alcohol licensee who packaged the alcohol. This information will assist in the administration and enforcement of the Act by identifying the origin of the alcohol. These Regulations closely resemble the existing guidelines Guidelines for Distillery Operations — Labels to be Used on Bottled Spirits under the Excise Act. The existing guidelines also require the pre-approval of all labels to be placed on a container of spirits; this practice will not be continued under the Excise Act, 2001. The existing guidelines allow a distiller to display the name and address or, the licence number of a licensed distiller for whom the spirits are being bottled, if the other licensee accepts responsibility for the product, in writing, and stipulates that it is able to identify the actual bottling distiller of the bottling product. This helps ensure the responsible distiller is identified and this practice will continue. Alternatives There is no reasonable alternative to the making of these Regulations. In order to be able to identify the person who packaged a container of alcohol, these Regulations are required to prescribe the information that must be displayed on a container of alcohol. Benefits and Costs There are no increased costs as a result of these Regulations. Bottlers of alcohol are presently placing this information on labels currently in use. There are no increased costs to the Canada Customs and Revenue Agency (CCRA) as a result of these Regulations. Minimal resource savings will be realized resulting from the elimination of the label pre-approval process. The post-review of labels used by a licensee is already a part of the standard audit program and will continue. Consultation The CCRA and the Department of Finance carried out extensive consultations with members of the affected industries, the Royal Canadian Mounted Police (RCMP) and other government departments after the Draft Regulations were released in December 2001. The RCMP and the CCRA Laboratory and Scientific Services Directorate expressed some concern regarding the elimination of the label pre-approval process as this databank has been utilized in the past to identify legitimate labels. The CCRA will not be maintaining an ongoing databank of labels approved for legitimate use. However, the benefits of removing the burden of the pre-approval process for licence holders outweigh the infrequent use of the existing databank. In addition, all legitimate labels will continue to be held by the spirit and wine licence holders and will still be available for verification purposes at those premises, as required. Compliance and Enforcement Compliance with these Regulations will be monitored by CCRA auditors on a post-review basis. A licensee who fails to display all the required information is liable to an administrative penalty up to $25,000 under section 250 of the Act. Mark Hartigan, Manager, Excise Act, 2001 — Implementation, Excise Duties and Taxes Division, Excise and GST/HST Rulings Directorate, Policy and Legislation Branch, Place de Ville, 20th Floor, 320 Queen Street, Ottawa, Ontario K1A 0L5, (613) 954-9854 (Telephone), (613) 954-2226 (Facsimile). Notice is hereby given that the Governor General in Council, pursuant to paragraph 304(1)(f) of the Excise Act, 2001 (see footnote a) , proposes to make the annexed Regulations Respecting the Information to be Displayed on Alcohol Containers and their Packaging. Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Mark Hartigan, Policy and Legislation Branch, Canada Customs and Revenue Agency, 20th Floor, Tower A, Place de Ville, 320 Queen Street, Ottawa, Ontario K1A 0L5. Persons making representations should identify any of those representations, the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act. Ottawa, March 27, 2003 EILEEN BOYD Assistant Clerk of the Privy Council REGULATIONS RESPECTING THE INFORMATION TO BE DISPLAYED ON ALCOHOL CONTAINERS AND THEIR PACKAGING INFORMATION 1. For the purpose of section 87 of the Excise Act, 2001, the prescribed information to be displayed is
(b) their licence number. COMING INTO FORCE 2. These Regulations take effect on July 1, 2003. [13-1-o] Return of Packaged Alcohol to an Excise Warehouse RegulationsStatutory Authority Excise Act, 2001 Sponsoring Agency Canada Customs and Revenue Agency REGULATORY IMPACT ANALYSIS STATEMENT Description The Excise Act, 2001 (the "Act") received Royal Assent on June 13, 2002, thereby replacing the legislative provisions of the existing Excise Act, regarding the production and distribution of alcohol and tobacco products. The Act authorizes the Governor in Council to make identified related regulations in support of the new legislation. Accordingly, the Return of Packaged Alcohol to an Excise Warehouse Regulations have been written to set out the criteria under which packaged alcohol that was removed from an excise warehouse can be returned to that excise warehouse. Licensed users are authorized under their licence to use bulk or non-duty-paid packaged spirits or wine in an approved formulation, the production of vinegar, the fortification of wine or the blending of spirits and wine where the finished product is spirits. In the case of imported spirits, a special duty of $0.12 is imposed on imported spirits delivered to a licensed user. This special duty replaces the current duty under section 2 of Part I of the schedule to the Excise Act and these Regulations will prescribe the conditions under which a refund of the special duty can be refunded on returned imported packaged spirits for use by licensed users. Registered users are organizations such as hospitals, universities and research facilities authorized under section 16 of the Act to use non-duty-paid packaged spirits for research, medicinal and scientific purposes. Circumstances may arise where a registered user or a licensed user may find packaged alcohol unsuitable or not up to standards after the container has been opened and a reasonable amount extracted for quality assurance testing. These Regulations prescribe the conditions under which packaged spirits can be returned by a registered user or a licensed user to the excise warehouse licensee who supplied them. Circumstances will arise where packaged spirits and wine will be returned to the excise warehouse of the supplier. In cases where packaged alcohol has left the excise warehouse and entered the duty paid market, there may be situations where the product needs to be returned to the warehouse. These returns would occur in the course of everyday business and may include incorrect shipments, overstocking at liquor stores, etc. These Regulations will prescribe the conditions that will allow the excise warehouse licensee to re-enter the alcohol into that warehouse as non-duty-paid alcohol. Currently, once the excise duty has been paid on alcohol that is removed from an excise bonding warehouse, there is no mechanism available to refund that payment of excise duty. These Regulations prescribe the conditions under which alcohol can be returned to the excise warehouse that supplied the alcohol and also the conditions under which the special duty can be refunded on returned imported packaged spirits for use by licensed users. Alternatives There is no reasonable alternative to the making of these Regulations. These Regulations are necessary to implement the Act's requirements for the return of packaged alcohol to an excise warehouse. Furthermore, these Regulations will recognize current business practices and will minimize the compliance burden on industry while providing a degree of control over the movement of packaged alcohol. Benefits and Costs Currently, once the excise duty has been paid on alcohol that is removed from an excise bonding warehouse, there is no mechanism available to refund that payment of excise duty. These Regulations will provide the framework to allow the refund of excise duty in these circumstances. There may be some initial costs to the provincial liquor boards as minor systems changes may be necessary, but it is anticipated that savings that result from the administration of the new legislation, particularly the streamlining of the refund provisions, will offset them. There will be no increased costs incurred by the CCRA and these Regulations will provide the CCRA with more flexibility to meet the requirements of modern excise compliance policy and modern business practices. Consultation The CCRA and the Department of Finance carried out extensive consultations with the affected industries. Draft regulations were released in December 2001 and a notice distributed in April 2002 to all current and potential licence and registration holders drawing their attention to the draft regulations and asking for submissions by June 30, 2002. Personal presentations and meetings were held with industry groups expressing interest, and suggestions were actively sought and taken into consideration. During meetings with Spirits Canada and the Canadian Association of Liquor Jurisdictions (CALJ) there were no concerns raised with respect to these Regulations. No written submissions or comments from other parties were received with respect to these Regulations. Compliance and Enforcement The CCRA is responsible for enforcing, at the manufacturer and importer level, the provisions of the Act and these Regulations. The Royal Canadian Mounted Police will carry out direct enforcement of these provisions on a day-to-day basis. Section 217 of the Act makes it an offence to contravene section 90 — unauthorized use or disposal of non-duty-paid packaged alcohol by a licensed user. A person found guilty of an indictable offence under section 217 is liable to a maximum fine of $22.132 multiplied by the number of litres of absolute ethyl alcohol in the spirits to which the offence relates, $1.0244 multiplied by the number of litres of wine to which the offence relates, $20 per litre with respect to denatured or specially denatured alcohol, imprisonment for a term of up to five years, or both the fine and imprisonment. A person convicted of an offence on summary conviction is liable to a fine of up to $100,000, imprisonment for a term not exceeding 18 months, or both the fine and imprisonment. Section 243 of the Act introduces a penalty to which a person who contravenes section 91 — unauthorized use or disposal of non-duty-paid packaged spirits by a registered user, is liable. The penalty under section 243 is equal to 100 percent of the duty imposed on the spirits involved in the contravention or $0.5122 per litre of wine involved in the contravention. Mr. Mark Hartigan, Manager, Excise Act, 2001 — Implementation, Excise Duties and Taxes Division, Excise and GST/HST Rulings Directorate, Policy and Legislation Branch, Place de Ville, 20th Floor, 320 Queen Street, Ottawa, Ontario K1A 0L5, (613) 954-5894 (Telephone), (613) 954-2226 (Facsimile). Notice is hereby given that the Governor in Council pursuant to paragraph 304(1)(o) of the Excise Act, 2001 (see footnote b) , proposes to make the annexed Return of Packaged Alcohol to an Excise Warehouse Regulations. Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Mark Hartigan, Policy and Legislation Branch, Canada Customs and Revenue Agency, 20th Floor, Tower A, Place de Ville, 300 Queen Street, Ottawa, Ontario K1A 0L5. Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act. Ottawa, March 27, 2003 EILEEN BOYD Assistant Clerk of the Privy Council RETURN OF PACKAGED ALCOHOL TO AN EXCISE WAREHOUSE REGULATIONS INTERPRETATION 1. In these Regulations, "Act" means the Excise Act, 2001. CONDITIONS 2. For the purposes of paragraph 90(d) of the Act, a licensed user may return non-duty-paid packaged alcohol to the excise warehouse licensee who supplied it if, at the time of its return to the warehouse, the alcohol is packaged in the same container in which it was packaged when it was removed from the warehouse and the container
(b) if opened, was opened by the licensed user solely for the purpose of analysis in accordance with paragraph 90(f) of the Act. 3. For the purposes of paragraph 91(c) of the Act, a registered user may return non-duty-paid packaged spirits to the excise warehouse licensee who supplied them if, at the time of their return to the warehouse, the spirits are packaged in the same container in which they were packaged when they were removed from the warehouse and the container
(b) if opened, was opened by the registered user solely for the purpose of analysis in accordance with paragraph 91(b) of the Act. 4. For the purposes of section 152 of the Act, duty-paid packaged alcohol that has been removed from an excise warehouse may be entered into that warehouse as non-duty-paid packaged alcohol if, at the time of its return to the warehouse, it is packaged in the same container in which it was packaged when it was removed from the warehouse and the container
(b) if opened, was opened by the licensed user or the registered user solely for the purpose described in paragraph 2(b) or 3(b), as applicable. 5. For the purposes of section 153 of the Act, non-duty paid packaged alcohol that has been removed from an excise warehouse may be entered into that warehouse as non-duty-paid packaged alcohol if, at the time of its return to the warehouse, it is packaged in the same container in which it was packaged when it was removed from the warehouse and the container
(b) if opened, was opened by the licensed user or the registered user solely for the purpose described in paragraph 2(b) or 3(b), as applicable. 6. For the purposes of subsection 185(2) of the Act, the Minister may refund the special duty that has been paid on imported packaged spirits that are returned by a licensed user to the excise warehouse of the excise warehouse licensee referred to in that subsection if, at the time of their return to the warehouse, the spirits are packaged in the same container in which they were packaged when they were removed from the warehouse and the container has not been opened. COMING INTO FORCE 7. These Regulations take effect on July 1, 2003. [13-1-o] S.C. 2002, c. 22 S.C. 2002, c. 22 |
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