Ups Joins Effort To Reduce Youth Smoking

Attorney General Spitzer today announced an agreement with UPS, the world’s largest package delivery company, to help reduce youth access to cigarettes over the Internet.

Under the agreement, UPS will stop all deliveries of cigarettes to consumers throughout the United States. The agreement is part of a continuing effort to end the sale and shipment of contraband cigarettes over the Internet.

"I commend UPS for cooperating with us in this initiative," Spitzer said. "The Internet has become a haven for illegal cigarette traffickers, and this agreement eliminates one more avenue through which these criminal enterprises had been shipping their products throughout the country."

Internet and mail order cigarette retailers operate in violation of numerous federal, state and local laws, including tax laws, age verification laws, delivery restrictions, reporting requirements, and federal wire fraud and mail fraud statutes. As a result, a coalition of federal, state and local law enforcement officials has been working on a multi-faceted initiative to stop these illegal sales, including federal and state criminal indictments of cigarette sellers, seizures of contraband cigarettes, and efforts to strengthen cigarette trafficking prohibitions.

At the same time, state attorneys general and the federal Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF") have asked legitimate businesses whose services are used by the cigarette traffickers not to facilitate the illegal transactions. In March 2005, all of the major credit card companies agreed not to process payment transactions for cigarette sales. In addition to UPS, DHL agreed in July not to deliver cigarettes for these illegal Internet sellers.

"UPS’s cooperation reinforces its commitment to compliance and consistency in its network and operations," said Dale Hayes, UPS Vice President of Marketing.

"This initiative is an excellent example of law enforcement and private industry working together to stop illegal transactions from occurring, and I welcome UPS’s participation in this effort," said Spitzer. "In addition to helping to stop criminal activity, this is also an important public health issue, because an increasing number of children are obtaining cigarettes over the Internet."

The agreement does not prohibit UPS from making lawful shipments of cigarettes to licensed tobacco businesses and other authorized recipients.

Attorney General Spitzer again urged Congress to enact federal legislation explicitly prohibiting the United States Postal Service from shipping cigarettes through the mail.

In September 2005, the Postal Service adopted a formal policy recognizing that it "cannot knowingly permit the mails to be used to further activities deemed unlawful by state and federal authorities." However, the policy inexplicably authorizes postal employees to accept packages "suspected of containing untaxed or undertaxed cigarettes."

"Internet cigarette traffickers are increasingly using the federal mail system to distribute their wares," said Spitzer. "The Postal Service clearly has the legal authority to refuse these shipments, but has not done so. It is an embarrassment that major private companies have stopped carrying contraband cigarettes, but the federal government continues to accept them. Congress needs to step in and stop this practice immediately."

Discussions with UPS were handled by Assistant Attorney General Vincent Esposito, Jr. under the supervision of Health Care Bureau Chief Joseph Baker and Deputy Bureau Chief Sandra Jefferson Grannum.

A copy of the UPS agreement is attached.

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