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DEPARTMENT OF THE TREASURY Alcohol and Tobacco Tax and Trade Bureau TTB Ruling Number: 2012–3 October 11, 2012 Recognition of Andong Soju and Gyeongju Beopju as Distinctive Products of Korea The Alcohol and Tobacco Tax and Trade Bureau (TTB) confirms that “Andong Soju” and “Gyeongju Beopju” are distinctive products of the Republic of Korea that must be manufactured in the Republic of Korea in accordance with the laws and regulations of the Republic of Korea governing the manufacture of those products. TTB RULING 2012–3 Background United States–Korea Free Trade Agreement Pursuant to Article 2.13.2 of the United States–Korea Free Trade Agreement, the United States agreed to recognize “Andong Soju” and “Gyeongju Beopju” as distinctive products of the Republic of Korea. Accordingly, the United States agreed not to permit the sale of any product as “Andong Soju” or “Gyeongju Beopju” if the product has not been manufactured in the Republic of Korea in accordance with the laws and regulations of the Republic of Korea governing the manufacture of Andong Soju and Gyeongju Beopju. In like manner, pursuant to Article 2.13.1 of the United States–Korea Free Trade Agreement, the Republic of Korea agreed to recognize “Tennessee Whiskey,” which, for the purposes of this free trade agreement, is a straight Bourbon Whiskey authorized to be produced only in the State of Tennessee, and “Bourbon Whiskey” as distinctive products of the United States. Accordingly, the Republic of Korea agreed not to permit the sale of any product as Bourbon Whiskey or Tennessee Whiskey, if it has not been manufactured in the United States in accordance with the laws and regulations of the United States governing the manufacture of Bourbon Whiskey and Tennessee Whiskey. On January 11, 2012, TTB published Ruling 2012–1 to state that “Andong Soju” and “Gyeongju Beopju” are geographical designations under 27 CFR 5.22(k)(3) and will not apply to distilled spirits products other than those produced in the particular place or region indicated by such name. The Republic of Korea later clarified that Gyeongju Beopju is a wine produced from rice rather than a distilled spirit, and provided information about the method of manufacture to TTB. TTB reviewed the information and found that Gyeongju Beopju is appropriately classified as a wine. Although TTB Ruling 2012–1 remains accurate with respect to Andong Soju, TTB is issuing this Ruling OPR: ITD -2- to supersede TTB Ruling 2012–1 to provide for Gyeongju Beopju as a wine and to continue to provide for Andong Soju as a distilled spirit. TTB Regulations The requirements in 27 CFR 5.22(k)(3) establish a standard of identity for distilled spirits products having geographical designations. Under this section, geographical names that are not distinctive types of distilled spirits, and that have not become generic, will not be applied to distilled spirits produced in any other place than the particular place or region indicated in the name. The name “Andong Soju” is a geographical name under § 5.22(k)(3) and will not apply to distilled spirits products other than those produced in the particular place or region indicated by such name. Further, “Andong Soju” must be manufactured in accordance with the laws and regulations of the Republic of Korea governing its manufacture. The standards of identity for wine in 27 CFR 4.21(f) establish a class of wine (Class 6) that is made from “other agricultural products,” including rice. Under § 4.21(f)(6), wine of this class derived wholly (except for sugar, water, or added alcohol) from one kind of agricultural product, such as rice, shall except for “sake,” be designated by the word “wine” qualified by the name of such agricultural product, e.g., “rice wine.” Thus, given the make-up of Gyeongju Beopju, it must currently be labeled as “rice wine.” TTB intends to undertake rulemaking to provide for Gyeongju Beopju as a type of wine under Class 6 that must be manufactured in the Republic of Korea in accordance with the laws and regulations of the Republic of Korea governing the manufacture of Gyeongju Beopju. In the interim, TTB has determined that “Gyeongju Beopju” is a nongeneric name of geographic significance under 27 CFR 4.24(c)(1) that may be used only to designate wines of the origin indicated by such name. Furthermore, TTB has determined that the use of the term “Gyeongju Beopju” on labels of products that have not been manufactured in the Republic of Korea in accordance with Korean laws and regulations governing its manufacture is misleading under 27 CFR 4.39(a)(1) and is thus prohibited. TTB Determination Regarding Andong Soju and Gyeongju Beopju as Distinctive Products of Korea Held: TTB determines that the name “Andong Soju” is a geographical designation under 27 CFR 5.22(k)(3) and will not apply to distilled spirit products other than those produced in the particular place or region indicated by such name. TTB also determines that, until rulemaking can be completed, the name “Gyeongju Beopju” is a nongeneric name of geographic significance under 27 CFR 4.24(c)(1), and that use of the name on labels of products that have not been manufactured in the Republic of Korea in accordance with Korean laws and regulations governing its manufacture is misleading under 27 CFR 4.39(a)(1) and is thus prohibited. Further, Andong Soju and Gyeongju Beopju must be manufactured in the Republic of Korea in accordance with OPR: ITD -3- the laws and regulations of the Republic of Korea governing the manufacture of Andong Soju and Gyeongju Beopju. Date signed: John J. Manfreda Administrator Alcohol and Tobacco Tax and Trade Bureau OPR: ITD