The Contraband Cigarette Trafficking Act (CCTA) identifies and investigates counterfeit cigarette sellers and prosecutes them for selling contraband tobacco products to unsuspecting consumers. In the United States, cigarette trafficking and the sale of contraband cigarettes are typically addressed through a combination of federal and state laws. Federal laws such as the Contraband Cigarette Trafficking Act of 1978 (CCTA) have been enacted to combat illegal cigarette trafficking and smuggling across state lines. It was amended in 2006 with the re-authorization of the Patriot Act to address criminals who avoided paying tobacco sales taxes and illegally profiting from the interstate trafficking, possession, and sale of non-state cigarettes and smokeless tobacco. The CCTA imposes penalties on individuals or entities engaged in the illicit trafficking of cigarettes.
State laws also play a crucial role in regulating cigarette sales, distribution, and taxation. States often have their own laws targeting the sale of contraband or untaxed cigarettes within their borders.
ATF serves as the federal agency responsible for enforcing CCTA. The bureau works with interagency partners to make sure that authentic tobacco sales revenues are distributed to accurate federal and state agencies. ATF works closely with the Federal Drug Administration (FDA), which regulates health aspects of the distribution of tobacco, the Tobacco Trade Bureau (TTB), State Tobacco tax regulators, and the National Association of Attorney Generals Center for Tobacco and Public Health to make sure that authentic tobacco sales revenues are distributed to the right federal and state agencies. ATF also works with Tribal Organizations to ensure the lawful distribution of tobacco.
CCTA makes it a federal crime to ship, transport, possess, sell, receive, distribute, or purchase more than 10,000 cigarettes without tax stamps in the states requiring tax stamps or 500 units of smokeless tobacco without proper documentation of state tax payments or in violation of state regulatory laws.
Under 27 C.F.R. § 646.147(a), an “exempted person” defined under 27 C.F.R. § 646.143), is an individual who distributes more than 60,000 cigarettes to another exempted person or who otherwise delivers more than 60,000 cigarettes to a recipient’s place of business and needs to maintain the following dated records:
- Identify the full name of the purchaser (or recipient).
- List the complete street address, including the city and state the cigarettes were delivered to, and
- Provide the quantity of cigarettes distributed.
