In a medium bowl, combine sugar and flour. Cut in butter with pastry cutter or fingers until dough forms fine crumbs.

Add the vanilla, orange juice, cranberries and orange peel. Knead until it comes together into a ball. If dough is still crumbly, add more orange juice one tablespoon at a time until it forms a ball. Wrap in plastic wrap and let chill for at least 2 hours.

Roll dough on a floured surface about 1/4-inch thick. Cut circles out of dough and place on parchment paper-lined cookie sheet and chill in fridge for 30 minutes.

Preheat oven to 325 degrees.

Put vanilla sugar in bowl. Carefully dip tops of chilled cookies into sugar. If they bend or break, chill for longer before dipping.

Bake for 12-14 minutes. Let sit on cookie sheet for several minutes before moving to wire rack to cool completely.