Lawmakers Propose Bill to Stop Smuggled Tobacco Trade

WASHINGTON, D.C. -- Three Democrat lawmakers are banding together to bring an end to smuggled tobacco. Sens. Frank R. Lautenberg (D-NJ) and Dick Durbin (D-IL) and Rep. Lloyd Doggett (D-TX) introduced the Smuggled Tobacco Prevention (STOP) Act.

The legislation 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.

Under the STOP Act, packages of tobacco products would be required to be uniquely marked to help law enforcement efforts to track and trace tax payments on tobacco products. It would also ban the sale, lease and importation of tobacco product manufacturing equipment to unlicensed people.

Furthermore, the bill would prevent the illegal re-entry of tobacco products intended for export by requiring export warehouse proprietors to file reports with the Treasury Department. It also would increase penalties for violating the law and establish new offenses, according to a release posted on Lautenberg's website.

"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," Lautenberg said. "By stopping the sale of illegal cigarettes at below-market prices, we can reduce smoking and fight tobacco-related diseases."

Added Durbin, "This bill will help us crack down on tobacco smuggling and keep black market cigarettes out of the hands of kids. 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."

The U.S. Department of Justice estimates that tobacco smuggling in the country costs federal and state governments at least $5 billion in lost revenue annually. "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 But current federal laws to stop smugglers are outdated and fail to give law enforcement officials the tools they need to enforce the law," Doggett said. "Snuffing out smuggled tobacco, whether sold here or shipped across our borders, can cut crime, raise revenue and boost health."

The unique, high-tech identification mark that the proposed legislation would require is similar to one California is already using, according to the lawmakers. 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 counterfeits; identify who applied the marking and initially sold and purchased the product; and obtain other information useful for tracking, tracing and enforcement purposes.