[Congressional Record Volume 145, Number 98 (Tuesday, July 13, 1999)]
[House]
[Page H5370]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               TOBACCO SMUGGLING ERADICATION ACT OF 1999

  The SPEAKER pro tempore (Mr. Gutknecht). Under the Speaker's 
announced policy of January 19, 1999, the gentleman from Texas (Mr. 
Doggett) is recognized during morning hour debates for 5 minutes.
  Mr. DOGGETT. Mr. Speaker, the World Bank recently issued a report 
entitled, ``Curbing the Epidemic: Governments and the Economics of 
Tobacco Control,'' which finds disturbing trends in tobacco use around 
the globe. This report concludes that, in another 2 decades, tobacco 
will become the single biggest cause of premature death worldwide, 
accounting for 10 million deaths each year. That is 10 million unique 
human beings choking to death with emphysema, withering away with lung 
cancer, or perhaps feeling the sharp pain of a heart attack as a result 
of nicotine addiction. Half of these deaths will occur to individuals 
in middle age, who will each lose 20 to 25 years of their life.
  Effective and aggressive action against tobacco smuggling represents 
one key strategy necessary in what should be a comprehensive global 
effort to address this pandemic, according to both the World Bank and 
the World Health Organization. To assure that our country is 
participating in such action, I am today introducing the Tobacco 
Smuggling Eradication Act. This measure is important in both fighting 
organized crime and in promoting public health.
  In a statement endorsing this bill yesterday, ENACT, a coalition of 
55 major national medical and public health organizations, including 
the American Cancer Society, the American Heart Association, and the 
Campaign for Tobacco Free Kids, had this to say of my bill:
  ``Your bill would strengthen domestic antismuggling efforts and 
address the shameful fact that lax oversight of U.S. cigarette exports 
is fueling an international black market in U.S. cigarette brands. 
Researchers estimated that about one-third of all cigarette exports 
disappear into the black market. U.S. brands such as Marlboro, Camel, 
Winston, and Kent are the most commonly smuggled. Tobacco smuggling 
seriously undermines public health laws in other countries and is an 
embarrassment to our nation.''
  Just how big an embarrassment is reflected in this national news 
story from the Washington Post last December, entitled, ``Tobacco 
affiliate pleads guilty to role in smuggling scheme.'' An affiliate of 
the RJ Reynolds Company, one of the tobacco giants, was caught up in 
illegality in participating in a scheme to avoid $2.5 million in U.S. 
excise taxes.
  Nor is RJR the only tobacco giant caught up in such criminality. Last 
year, a senior judge in Hong Kong concluded that British-American 
Tobacco and Brown and Williamson were helping international organized 
crime by selling duty-free cigarettes ``worth billions and billions of 
dollars with the knowledge that those cigarettes would be smuggled into 
China and other parts of the world.''
  While most of the attention with our relations with the country of 
Colombia focuses on the illegal drugs from there to here, a study last 
year found that more than four-fifths of the 5.5 billion Malboro 
cigarettes that are produced here by Philip Morris and sold there in 
Colombia are illegal smuggled goods.
  Far from hurting business, tobacco companies have found that they can 
move their lethal products around the world by assisting smugglers. Big 
tobacco profits from selling cigarettes to smugglers who reduce the 
price for the black market and increase consumption and sales, helping 
them build a global market.
  My bill requires that packages for export be clearly labeled for 
export to prevent illegal reentry into the United States. That is the 
scheme that the RJR affiliate used, claiming that cigarettes were 
reentering our country for export to Russia and Estonia when, in fact, 
they were going on the black market smuggled from New York into Canada.
  Our bill also requires that packages of tobacco products manufactured 
here or imported here also be uniquely marked. Law enforcement agents 
have said will give the opportunity to trace the products, verify the 
source, and have the labeling requirements that they need for effective 
law enforcement.
  Under this bill, retailers and wholesalers will be required to keep 
documents on tobacco shipments which will greatly assist law 
enforcement. As our Treasury Secretary Larry Summers said last year 
during congressional testimony, ``The Treasury Department believes that 
the creation of a sound regulatory system, one that will close the 
distribution chain for tobacco products, will ensure that the diversion 
and smuggling of tobacco can be effectively controlled.''
  With the help of the Treasury Department, that is exactly what this 
bill will do. It will also assist the States in enforcing and 
collecting their excise taxes on all tobacco products. Recent studies 
have indicated that the States of Washington, Michigan, Massachusetts, 
New York, and California each lose $30-100 million per year in excise 
taxes on tobacco products because of smuggling. Last year, big tobacco 
spent millions to promote false claims that our Federal legislative 
proposals to reduce youth smoking would cause smuggling. Now is the 
time for big tobacco to get behind this effective law enforcement 
legislation or once again to reveal its hypocrisy,
  Mr. Speaker, with the introduction of this bill, we hope to stop the 
smuggling and stop the mugging of the world's children through nicotine 
addiction.

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