[Congressional Record (Bound Edition), Volume 148 (2002), Part 10]
[House]
[Page 13925]
[From the U.S. Government Publishing Office, www.gpo.gov]




               TOBACCO SMUGGLING ERADICATION ACT OF 2002

  Mr. DOGGETT. Mr. Speaker, this week, with the support of over 60 of 
our colleagues, I am introducing major law enforcement legislation both 
to prevent crime and to promote the health of Americans and people 
around the world.
  The Tobacco Smuggling Eradication Act seeks to slow illicit 
trafficking in tobacco, the world's most widely smuggled legal consumer 
product.
  Across America this year alone some 17 States have already approved 
cigarette tax hikes. Increasing the price of cigarettes is one of the 
most effective ways of discouraging children from a lifetime of 
nicotine addiction. While each tax increase advances public health, it 
also increases the incentives for smuggling cheaper, ``tax-free'' black 
market tobacco.
  At a time of tight budgets, State and Federal authorities in the 
United States are suffering losses of more than $1.5 billion each year 
in evaded cigarette taxes. By cracking down on smuggling, we can 
collect this much-needed revenue. With prices rising as high as $7 a 
pack in New York City, the need is even greater to stop those who offer 
smokers a nicotine hit without a tax hit.
  The same incentives that exist here in America exist around the world 
when American tobacco is exported--from Canada to Iraq, from China to 
Colombia. Of all cigarettes manufactured within the United States for 
export, it is estimated that from one in three to one in four of those 
cigarettes will be sold illegally without collection of taxes.
  Internal tobacco company documents indicate that big tobacco 
companies themselves know that their cigarettes are sold to 
distributors and agents who will smuggle them illegally. In too many 
cases they have carefully overseen and even directed the actions of 
smuggling intermediaries, ensuring that customers have access to these 
lower black market prices.
  The health consequences of smuggling are severe because the number of 
nicotine-addicted children and poor increases dramatically with the 
availability of cheap tobacco. The World Bank reports that within the 
next two decades, tobacco will become the single biggest cause of 
premature death worldwide accounting for 10 million deaths each year. 
That is the equivalent of 70 jet planes crashing every single day, and 
70 percent of these deaths will occur in developing countries that are 
least able to fend off the giant tobacco companies and protect their 
families.
  These are unique individuals who will choke to death with emphysema, 
wither away with lung cancer, or suffer the severe pain of a heart 
attack. If urgent action is not taken, tobacco will soon end even more 
lives than the combined total of all to be killed by AIDS, 
tuberculosis, maternal deaths in childbirth, automobile accidents, 
homicides, and suicides.
  In preparing this bill, I have worked closely with Federal and State 
authorities to develop measures that will help them better crack down 
on tobacco tax evaders. This bill will enable law enforcement officials 
to share information with foreign countries about international 
smuggling and authorize new tools to combat smuggling within the US.
  To prevent diversion, this bill requires that packages of tobacco 
products be labeled to facilitate tracing them and verifying their 
manufacturing source. Packages for export must also clearly be labeled 
for export to prevent illegal reentry. Additionally, this bill will 
close the distribution chain and prevent transfers from the legal 
market by requiring retailers and wholesalers to maintain documents 
that law enforcement needs to monitor tobacco shipments.
  Essential Action and other public interest groups indicated in a 
briefing paper by the Framework Convention on Tobacco Control Alliance 
that requiring wholesalers, manufacturers and import-export business to 
be licensed would be one of the ``most effective interventions against 
large-scale smuggling.'' With the additional permitting requirements in 
this bill, the US would meet this objective.
  While, unfortunately, the Bush Administration has been largely an 
obstacle rather than a force for constructive international action to 
address nicotine addiction, I am pleased that next week in New York 
City, the United States will host the International Conference on 
Illicit Tobacco Trade. I encourage the Administration to actively 
support this Tobacco-Smuggling Eradication Act, which the American Lung 
Association and a number of other major public health groups have said 
``makes good sense as a matter of law enforcement, health policy and 
international leadership.''
  We must act now to stop the smuggling and stop the mugging of the 
world's children through nicotine addiction promoted by big tobacco 
companies.

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