REMOVALS OF TOBACCO PRODUCTS FROM EXPORT WAREHOUSES
FOR FOREIGN DIPLOMATIC OFFICERS NOT AUTHORIZED
Proprietors of export warehouses:
Purpose. This circular is issued to make it clear that tobacco products may
not be removed from export warehouses, without payment of tax, for sale or
delivery to diplomatic officers of foreign countries or to personnel of
foreign embassies for consumption in the United States.
Background. Recently, tobacco products have been removed, without payment of
tax, from bonded internal revenue export warehouses, consigned to various
diplomatic officers in the United States. Such removals are not authorized
under the statutes.
Statutory provisions. Section 5704 of the Internal Revenue Code provides,
in part, that an export warehouse proprietor may remove tobacco products,
without payment of tax, for shipment to a foreign country, Puerto Rico, the
Virgin Islands, or a possession of the United States, or for consumption
beyond the jurisdiction of the internal revenue laws of the United States.
This section of law makes no provision for the exemption from tax on such
products for diplomatic officers or personnel of foreign embassies in the
In addition, the exemptions from tax and duty in the Tariff Schedules of the
United States (Schedule 8, Part 2, Subpart CPersonnel of Foreign Governments
and International Organizations; Distinguished Visitors) are limited to
articles which are imported into the United States. Therefore, these exemptions are not applicable to tobacco products stored in en export warehouse.
Responsibility for proper delivery. Export warehouse proprietors are reminded
that, under the provisions of Section 290.64, they are responsible for the
proper removal and delivery of tobacco products. Tobacco products improperly
removed are subject to the payment of tax as provided in Section 5703, I.R.C.
Inquiries. Inquiries in regard to this industry circular should refer to its
number and be addressed to the office of your assistant regional commissioner
(alcohol and tobacco tax).
Harold A. Serr
Director, Alcohol and Tobacco Tax Division