Record Keeping and Reporting
According to 27 C.F.R. § 646.147(a), an “exempted person” which is 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 is required 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.
For all other distributions of more than 60,000 cigarettes, the distributor must also collect and maintain the following data:
- Obtain the name, complete address, including the city and state, as well as the signature of the person receiving the cigarettes;
- Identify the driver’s license number of the individual receiving the cigarettes;
- List the license number of the vehicle in which the cigarettes are removed from the distributor’s business premises;
- Secure a written declaration from the individual receiving the cigarettes identifying the specific reason(s) for the purchase/receipt. This may include personal use, resale, delivery to another person or etc.)
- Collect a written declaration from the person receiving the cigarettes that identifies the name and address of his/her principal when receiving individual is acting as an agent.
See 27 C.F.R. Part 646.
Right of Inspection
Per 18 U.S.C. § 2343(c), any officer of ATF may, during normal business hours, enter the premises of any regulated person to:
- Inspect required records and information; and
- Inspect cigarettes and smokeless tobacco inventories
NOTE: Failure to allow an inspection will result in a civil penalty of $10,000.
Penalties
Individuals who intentionally violate ;18 U.S.C. § 2342(a) will be subject to a fine or imprisonment of not to exceed five years, or both.
People who knowingly violate all rule or regulations under 18 U.S.C. § 2343(a) and § 2346 or violates 18 U.S.C. § 2342(b) will be fined or imprisoned not more than 3 years, or both.
Also, any contraband cigarettes or smokeless tobacco involved in any CCTA violation will be subject to seizure and forfeiture.
Proceeds of CCTA violations are subject to administrative, civil and/or criminal forfeiture.
Other Applicable Statutes Involving Illegal Tobacco Trafficking
It is a crime to use wire transmissions or the mail delivery services in a scheme to defraud the federal government of tax revenue based on 18 U.S.C. §§ 1341 and 1343. The CCTA is identified as a racketeering activity under the Federal Racketeering laws, 18 U.S.C. § 1961, and a specified unlawful activity under the Federal Money Laundering statutes such as 18 U.S.C § 1956. The proceeds of violations of the CCTA are subject to seizure and forfeiture.
ATF works closely with the Federal Drug Administration (FDA), which regulates health aspects of the distribution of tobacco, alcohol; 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 correct federal and state agencies. ATF also works with Tribal Organizations to assure the lawful distribution of tobacco.
Report Suspected Violations
You are encouraged to share information about suspected CCTA violations by sending an email to atebmailbox@atf.gov.
Contact Us
Submit your questions about tobacco diversion to atebmailbox@atf.gov.
