Bill battles illegal selling of cigarettes

WASHINGTON — Organized crime syndicates and terrorist organizations would lose a lucrative source of funding under a bill the Senate passed to curtail illegal cigarette trafficking, its supporters say.

Senate Judiciary Committee Chairman Orrin Hatch, R-Utah, said the bill "is designed so that the profits of those currently benefiting from contraband cigarettes will go up in smoke."

The Senate passed the bill late Tuesday evening by voice vote.

Interstate cigarette sellers would have to follow stricter reporting requirements under the legislation. Sellers who violate the reporting requirements could be charged with a felony. The bill would also create a substantial civil penalty for violating reporting requirements.

The bill would also strengthen the ability of states and cigarette manufacturers to stop the illegal domestic sale of U.S. tobacco products prepared for export.

The legislation gives state attorneys general the option to bring action in federal court against Internet vendors, who often violate state laws by failing to report sales to state tax administrators. A recent congressional report found that states will lose about $1.5 billion in revenues by 2005 if the current state of Internet tobacco sales continues.

"Illegal cigarette trafficking diverted revenue away from our financially strapped states into the pockets of criminals," said Sen. Herb Kohl, D-Wis. "I look forward to the reversal of that trend."