Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release - Thursday, January 26, 2006.

Contact Bob Brammer - 515-281-6699.

Miller: Philip Morris Agrees to Steps to Reduce Illegal Internet Cigarette Sales

New protocol will reduce supply of cigarettes to illegal Internet traffickers.

DES MOINES.   Attorney General Tom Miller said today that Philip Morris USA has agreed to several measures to combat the illegal sale of Philip Morris USA cigarettes over the Internet and through the mail. The protocols are being adopted voluntarily by Philip Morris USA pursuant to an agreement reached with 37 Attorneys General across the country.

"I think the bottom line here is that kids will have less access to cigarettes," Miller said. "And that's very important because most smokers start when they are young.

"Most traditional retailers check photo IDs to prevent children from buying cigarettes, but the great majority of Internet sellers have wholly inadequate age-verification systems," he said.

The protocols provide for: (a) termination of shipments of Philip Morris USA's cigarettes to any of its direct customers that the Attorneys General have found to be engaging in illegal Internet and mail order sales; (b) reduction of product made available to direct customers who are found by the Attorneys General to be engaged in the illegal re-sale of Philip Morris USA cigarettes to Internet vendors; and (c) suspension from Philip Morris USA incentive programs of any retailer found by the Attorneys General to be engaging in such illegal sales. [Click here for a copy of the Philip Morris USA Protocol.]

This is the third major effort to restrict Internet cigarette sales. Last year, all the major credit card companies agreed to stop processing credit card payments for Internet cigarette retailers, and both DHL and UPS agreed to stop shipping packages for vendors engaged in these illegal sales.

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Background:

The Attorneys General believe that virtually all sales of cigarettes over the Internet are illegal because the sellers are violating one or more state and federal laws, including: state age verification laws; the federal Jenkins Act (which requires that such sales be reported to state authorities); state laws prohibiting or regulating direct shipment of cigarettes to consumers; state and federal tax laws; federal mail and wire fraud statutes; and the federal RICO law. Many sales made by foreign websites also violate federal smuggling, cigarette labeling, money laundering and contraband product laws.

Philip Morris USA is the first tobacco product manufacturer to agree to reduce the supply of cigarettes to direct customers who supply vendors engaged in the illegal re-sale of its cigarettes on the Internet. The Attorneys General commended the company for its cooperation and said they will be encouraging other tobacco product manufacturers to take steps to reduce the supply of their cigarettes that are re-sold by illegal Internet cigarette traffickers.

The negotiations with Philip Morris USA were led by the New York State Attorney General's Office. In addition, the Attorneys General from the following jurisdictions have joined this agreement: AL, AR, American Samoa, CA, CO, CT, DE, District of Columbia, GA, HA, ID, IL, IA, KY, LA, MD, MA, MI, MT, NV, NH, NM, NJ, Northern Marianas, OK, OR, Puerto Rico, SC, SD, TN, UT, VT, WA, WV, WI, and WY.

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