ND1019111

Title: Congressmen Seek to Combat Black-Market Cigarettes

Description: The STOP Act would crack down on the proliferation of black-market cigarettes in the United States.

Page Content: WASHINGTON ? U.S. Rep. Lloyd Doggett (D-TX) and Sens. Frank R. Lautenberg (D-NJ) and Dick Durbin (D-IL) recently introduced the Smuggled Tobacco Prevention (STOP) Act, legislation that would collect hundreds of millions of dollars in revenue, decrease the consumption of tobacco, and combat criminals and terrorists who profit from the illegal trade of tobacco.

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?Tobacco products are the single largest, illegally trafficked, legal product on the planet. But current federal laws to stop smugglers are outdated and fail to give law enforcement officials the tools they need to enforce the law,? said Doggett in a press release. ?Snuffing out smuggled tobacco, whether sold here or shipped across our borders, can cut crime, raise revenue and boost health.?

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The STOP Act addresses the serious and growing problem of illegal tobacco trafficking by�requiring that packages of tobacco products be uniquely marked to aid law enforcement efforts to track and trace tax payments on tobacco products. It bans the sale, lease, and importation of tobacco product manufacturing equipment to unlicensed persons. The bill prevents the illegal re-entry of tobacco products intended for export by requiring export warehouse proprietors to file reports with the Treasury Department. It also increases penalties for violating the law and establishes new offenses.

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?Black market cigarettes are robbing our coffers of a critical revenue source that we need to pay for vital domestic programs like health insurance for children,? said Lautenberg. ?By stopping the sale of illegal cigarettes at below-market prices, we can reduce smoking and fight tobacco-related diseases.?

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The U.S. Department of Justice estimates that tobacco smuggling in the United States costs federal and state governments at least $5 billion in lost revenue annually. The STOP Act mandates that packages of tobacco products manufactured in or imported to the United States bear a unique, high-tech identification marking similar to that which California is already using.

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?This bill will help us crack down on tobacco smuggling and keep black market cigarettes out of the hands of kids,? said Durbin. ?At the same time, we?ll help the federal government and states collect the taxes they?re owed on these products so they have the resources necessary to continue much needed tobacco prevention and other health programs. I hope we?re able to quickly move this bill to the floor.?

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In California, the first state to implement such a system, cigarette tax revenues have increased by an estimated $152 million per year. This requirement, along with increased permit and record-keeping requirements throughout the supply chain, will enable enforcement officials to distinguish real tax markings from even the most advanced counterfeits, identify who applied the marking and initially sold and purchased the product, and obtain other information useful for tracking, tracing, and enforcement purposes. These requirements will help states and the federal government increase their tobacco tax receipts without raising taxes.

Content Subject: Government Relations

Formatted Article Date: October 19, 2011

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