Trends and Challenges in Combating Illicit Trade in Tobacco Products in the U.S.

Abstract

Most of the illicit tobacco trade (ITT) in the USA is caused by high tax rates on cigarettes in many states and localities and the availability of much cheaper cigarettes from low tax states and other low-tax jurisdictions, such as Tribal lands or Internet sales from domestic sellers or international sellers (who can evade all U.S. federal, state, local cigarette taxes). This chapter aims to give an account of how the U.S. deals with this and other problems of illicit tobacco trade, including both its successes and its shortcomings. The chapter gives an account of necessary aspects of regulation, and explains the enforcement side, including policy, applicable law, and agency involvement. Particular attention is paid to central challenges of U.S. efforts to fight the ITT, including prioritisation of ITT in comparison to other criminal activities, data on ITT related criminal activity, track and trace systems, and coordination among responsible agencies and levels of government.