Press Releases
08/01/2022
Attorney General Tong Announces Settlement with U.S. Postal Service to End Unlawful Cigarette Shipments
(Hartford, CT) – Attorney General William Tong today announced a settlement with the United States Postal Service (USPS) that implements robust measures to end foreign shippers’ unlawful practice of mailing cigarettes into the United States. The settlement resolves a lawsuit filed by Connecticut, California, Illinois, Pennsylvania, and the City of New York alleging the USPS has, for over a decade, transported and delivered untaxed, foreign cigarettes to U.S. households in violation of federal law.“Today’s settlement forces the U.S. Postal Service to do its job to stop the flow of foreign contraband cigarettes into the United States. These smuggled cigarettes cost all states, including Connecticut, hundreds of thousands of dollars in lost tax revenue, and hinder smoking cessation efforts. Our agreement compels the Postal Service to implement comprehensive reforms to detect and stop these illegal shipments,” said Attorney General Tong.
Passed by Congress in 2009, the Prevent All Cigarette Trafficking (PACT) Act prohibits the USPS from knowingly accepting or transporting cigarettes in the mail unless authorized by certain narrow exceptions. Although the PACT Act has largely deterred domestic sellers from shipping cigarettes through the mail to destinations within the United States, it has been less effective in stopping delivery of cigarettes mailed from overseas, because the USPS has routinely returned identified packages of cigarettes to their foreign shippers, who often then reship the packages back to the United States in further attempts to have them delivered.
Investigations undertaken by the New York City Sheriff’s Office and state attorneys general revealed that hundreds of thousands of packages of cigarettes are estimated to be mailed through foreign postal services, transferred into the U.S. mail system, and delivered to U.S. households each year. These investigations included package audits at USPS international mail facilities and undercover investigations of international cigarette sellers delivering their products to customers in the United States. The investigations demonstrated that the USPS’s practices for detecting and stopping the transport and delivery of cigarettes from overseas sources to consumers have been inadequate.
Following unsuccessful attempts to negotiate improvements to the USPS’s compliance with the PACT Act, in October 2019, Connecticut, California, Illinois, Pennsylvania, and the City of New York sued the USPS in federal court in Brooklyn, seeking a permanent injunction prohibiting the USPS from delivering packages known or reasonably believed to contain cigarettes and prohibiting the USPS’s practice of returning identified packages to shippers. The USPS’s attempt to dismiss the lawsuit was denied, and the court ruled that the USPS was subject to suit by state and local governments for violations of the PACT Act. The court also concluded that the USPS’s practice of returning cigarette packages to overseas senders violated the PACT Act.
In the settlement, the USPS has agreed to implement the following comprehensive reforms:
• Upgrade its Advance Electronic Data technology to significantly improve its ability to detect cigarette packages in international mail.
• Permanently discontinue its practice of returning cigarette packages to senders, and instead, destroy those cigarette packages as allowed by law, creating a costly disincentive to international shippers to continue selling untaxed, illegal cigarettes to U.S. customers.
• Provide the identifying information of illegal shippers to plaintiffs’ law enforcement arms so enforcement actions can be taken against the shippers.
• Designate a compliance manager to oversee and manage PACT Act compliance, including ensuring that the changes negotiated through the agreement are implemented.
• Form a joint committee, with representatives of each of the plaintiffs, which will assess the USPS’s progress in implementing reforms.
• Implement additional policies and employee training to ensure compliance with the PACT Act, and help employees recognize and dispose of packages containing cigarettes.
Cigarette smoking is a leading cause of preventable premature death in the United States. Smoking annually kills more than 480,000 people nationwide, a figure that exceeds the combined number of deaths from alcohol, motor vehicle collisions, and firearms. According to the World Health Organization and numerous public health studies, maintaining high taxes on cigarettes is the most effective anti-smoking policy intervention, particularly among youth.
Assistant Attorney General Heather Wilson assisted the Attorney General on this matter.
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