free cigarettes
Blumenthal believes that Internet sellers of tax-free free cigarettes would go out of business if they could not rely upon the Postal Service for delivery. UPS, FedEX and DHL have signed agreements with state attorneys general that they will not deliver tobacco products — but not the Postal Service. “This is the last refuge of illegal Internet sales,” Blumenthal said. “If we can just sever this channel it will have tremendous consequences for tax evasion as well as underage sales. In my view, it will happen. It is just a question of when.” Mary Anne Gibbons, general counsel for the Postal Service, said that the Postal Service has taken action to reduce the ability of tobacco retailers to use the mail for illicit sales but acknowledged that their existing authority is limited. The Postal Service has updated foreign posts on the general prohibition on foreign tobacco mailing and has cooperated with state and federal law enforcement to reduce illegal cigarette and tobacco sales. In 2007, five individuals were arrested and charged with money laundering, as well as violations of the Jenkins Act, which requires cigarette seller to send reports to the destination-state’s tax authorities to facilitate the collection of state tax. Tobacco sellers often use Priority Mail to send their products, which is sealed against inspection. A federal search warrant or consent would be needed to open those packages to determine if they contain ‘nonmailable’ matter, she said. Even if the law were changed, Gibbons said it would be difficult to enforce and require extraordinary resources. In 2007, the Postal Service handled 897 million Priority Mail packages, which can be dropped off at any of nearly 37,000 Post Offices. Moreover, there are only 1,700 inspectors who now concentrate on narcotics, child pornography, explosives, mail theft and elderly exploitation.