Ambergris is a whale excretion ("clotted whale cholesterol excreted by sperm whales" [link]) that was valuable in perfumery but was also an ingredient in Negus cocktail. Ambergris sometimes washes ashore and is collected, or it can be harvested from commercially hunted whales. [link]
According to Fenaroli's Handbook of Flavor Ingredients By George A. Burdock (2016 edition, p76) [link]: "Although ambergris is primarily used in perfumery, the tincture may be employed in the formulation of aromas to confer special bouquets to liqueurs, tobacco, fruit flavors and beverages, candy and ice cream flavors."
The legality of possessing ambergris, at least in the US, is murky. It appears that possessing ambergris is illegal, yet it is also approved for food use.
In the United States, ambergris tincture is listed on the "food additive status list" as "generally recognized as safe" [link].
According to a story in the San Francisco Chronicle [link]:
Michael Payne at the National Marine Fisheries Service, a U.S. federal agency in Silver Spring, Md., says that the Endangered Species Act of 1973 is far from ambiguous.
"It's illegal to possess ambergris in any form, for any reason," he says. Even picking up a stray lump from the beach is prohibited, according to Payne. However, there isn't a lot of precedent for prosecution. "I know we've issued warning letters," he says. "It was probably a very long time ago. It hasn't been since 1990."
According to whales.org [link]:
In most countries, including the UK and the rest of the EU, it is currently perfectly legal to salvage a lump of ambergris from beaches and sell it, either at auction or on sites such as eBay. All whale and dolphin species are strictly protected under EU law and international trade in whale products is banned. However, ambergris is treated differently, since CITES (the Convention on International Trade in Endangered Species) regards the substance as an excretion, like urine or faeces, and therefore, as a benign byproduct and hence not requiring to be covered under the Convention. The EU is currently happy to support this definition.
The situation is very different in the US and Australia, where possession of, or trade in, ambergris is banned.
In the US, sperm whales are protected under the Endangered Species Act of 1973, which prohibits the use of any product from an endangered species. However, ambergris is regarded as a bit of a ‘grey area’, being a waste product and thus capable of being 'salvaged' without needing to harm whales.
In Australia, ambergris is considered to be a whale product and therefore, its export and import is regulated under part 13A of the Environment Protection and Biodiversity Conservation Act, 1999.
According to The Spirits Business [link]:
Popular Hackney venue Nightjar found itself in a spot of hot water in 2012 after its premises were raided by authorities following a tip-off the bar sold a cocktail containing whale skin.
The bar’s Moby Dick cocktail contained “a small amount of whisky infused with a single 2cm by 5cm strip of dried whale skin”.
However, EU law bans the hunting and trading of cetaceans such as whales, forcing the bar to apologise and swiftly remove the controversial mix from its menu.
"A Whale of a Cocktail Ingredient" TheAtlantic.com [link]
"Ambergris: lucky, lucrative and legal?" [link]