Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Proposed Rules 44173 

5630 Fishers Lane, rm. 1061, Rockville, 

MD 20852. 

Instructions: All submissions received 

must include the agency name and 

Docket No. and Regulatory Information 

Number (RIN) (if a RIN number has been 

assigned) for this rulemaking. All 

comments received may be posted 

without change to http:// 

www.regulations.gov, including any 

personal information provided. For 

additional information on submitting 

comments, see the ‘‘Comments’’ heading 

in the SUPPLEMENTARY INFORMATION

section of this document. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http:// 

www.regulations.gov and insert the 

docket number, found in brackets in the 

heading of this document, into the 

‘‘Search’’ box and follow the prompts 

and/or go to the Division of Dockets 

Management, 5630 Fishers Lane, 

rm.1061, Rockville, MD 20852. 

FOR FURTHER INFORMATION CONTACT: 

Robert J. DeLuca, Center for Devices and 

Radiological Health, Food and Drug 

Administration, 10903 New Hampshire 

Ave., Bldg. 66, rm. G214, Silver Spring, 

MD 20993–0002, email: 

Robert.DeLuca@fda.hhs.gov, 301–796– 

6630. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In the Federal Register of April 5, 

2010 (75 FR 17093), FDA published a 

proposed rule to amend certain 

neurological device and physical 

medicine device regulations to establish 

special controls for these class II devices 

and to exempt some of these devices 

from the premarket notification 

requirements of the Federal Food, Drug, 

and Cosmetic Act. Interested persons 

were given until July 6, 2010, to 

comment on the proposed rule. 

II. Request for Comments 

Following publication of the April 5, 

2010, proposed rule, FDA received 

requests to allow interested persons 

additional time to comment. The 

requests asserted that the 90-day time 

period was insufficient to respond fully 

to FDA’s specific requests for comments 

and to allow potential respondents to 

thoroughly evaluate and address 

pertinent issues. The agency has 

considered the requests and is 

reopening the comment period until 

September 7, 2010. The agency believes 

the additional comment period allows 

adequate time for interested persons to 

submit comments without significantly 

delaying rulemaking on these important 

issues. 

III. How to Submit Comments 

Interested persons may submit to the 

Division of Dockets Management (see 

ADDRESSES) either electronic or written 

comments regarding this document. It is 

only necessary to send one set of 

comments. It is no longer necessary to 

send two copies of mailed comments. 

Identify comments with the docket 

number found in brackets in the 

heading of this document. Received 

comments may be seen in the Division 

of Dockets Management between 9 a.m. 

and 4 p.m. Monday through Friday. 

Dated: July 22, 2010. 

David Dorsey, 

Acting Deputy Commissioner for Policy, 

Planning and Budget. 

[FR Doc. 2010–18405 Filed 7–27–10; 8:45 am] 

BILLING CODE 4160–01–S 

DEPARTMENT OF JUSTICE 

Bureau of Alcohol, Tobacco, Firearms, 

and Explosives 

27 CFR Part 646 

[Docket No. ATF 22P; AG Order No. 3179– 

2010] 

RIN 1140–AA31 

Implementation of the USA PATRIOT 

Improvement and Reauthorization Act 

of 2005 Regarding Trafficking in 

Contraband Cigarettes or Smokeless 

Tobacco (2006R–1P) 

AGENCY: Bureau of Alcohol, Tobacco, 

Firearms, and Explosives (ATF), 

Department of Justice. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Department of Justice is 

proposing to amend the regulations of 

the Bureau of Alcohol, Tobacco, 

Firearms, and Explosives (ATF) to 

implement certain provisions of the 

USA PATRIOT Improvement and 

Reauthorization Act of 2005 (enacted 

March 9, 2006) relating to trafficking in 

contraband cigarettes or smokeless 

tobacco. The new law amends the 

Contraband Cigarette Trafficking Act by: 

reducing the threshold amount of 

cigarettes necessary to trigger 

jurisdiction under the CCTA from a 

quantity in excess of 60,000 to a 

quantity in excess of 10,000; extending 

the provisions of the CCTA to cover 

contraband smokeless tobacco; 

imposing reporting requirements on 

persons, except tribal governments, who 

engage in delivery sales of more than 

10,000 cigarettes or 500 single-unit 

consumer-sized cans or packages of 

smokeless tobacco in a single month; 

requiring that cigarettes and smokeless 

tobacco seized and forfeited under the 

CCTA be either used in law enforcement 

operations or destroyed; and by 

authorizing state and local governments, 

and Federal tobacco permittees to bring 

civil causes of action against violators of 

the CCTA. 

DATES: Written comments must be 

postmarked and electronic comments 

must be submitted on or before October 

26, 2010. Commenters should be aware 

that the electronic Federal Docket 

Management System will not accept 

comments after midnight Eastern Time 

on the last day of the comment period. 

ADDRESSES: Send comments to any of 

the following addresses— 

• James P. Ficaretta, Program 

Manager, Mailstop 6N–602, 

Enforcement Programs and Services, 

Bureau of Alcohol, Tobacco, Firearms, 

and Explosives, U.S. Department of 

Justice, 99 New York Avenue, NE., 

Washington, DC 20226; Attn: ATF 22P. 

Written comments must appear in a 

minimum 12-point size of type (.17 

inches), include your mailing address, 

be signed, and may be of any length. 

• 202–648–9741 (facsimile). 

• http://www.regulations.gov. Federal 

eRulemaking portal; follow the 

instructions for submitting comments. 

You may also view an electronic 

version of this proposed rule at the 

http://www.regulations.gov site. 

Comments may also be submitted 

electronically to ATF to http:// 

www.regulations.gov by using the 

electronic comment form provided on 

that site. You may also view an 

electronic version of this proposed rule 

at the http://www.regulations.gov site. 

Comments submitted electronically 

must contain your name and mailing 

address. They must also reference this 

document docket number, as noted 

above, and be legible when printed on 

81⁄2′′ x 11′′ paper. ATF will treat 

comments submitted electronically as 

originals and it will not acknowledge 

receipt of comments submitted 

electronically. Interested parties will not 

be able to submit comments 

electronically to ATF via http:// 

www.regulations.gov after the comment 

period closes. 

See the Public Participation section at 

the end of the SUPPLEMENTARY

INFORMATION section for instructions and 

requirements for submitting written 

comments, and for information on how 

to request a public hearing. 

FOR FURTHER INFORMATION CONTACT: 

James P. Ficaretta; Enforcement 

Programs and Services; Bureau of 

Alcohol, Tobacco, Firearms, and 

Explosives; U.S. Department of Justice; 


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44174 Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Proposed Rules 

99 New York Avenue, NE., Washington, 

DC 20226, telephone (202) 648–7094. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In 1978, the Contraband Cigarette 

Trafficking Act (CCTA), 18 U.S.C. 

Chapter 114, was enacted to deter the 

interstate smuggling of cigarettes where 

the taxation on tobacco products varies 

between the States. The Bureau of 

Alcohol, Tobacco, Firearms, and 

Explosives (ATF) was given primary 

jurisdiction to enforce and administer 

the CCTA. Contraband cigarettes were 

originally defined as any quantity of 

more than 60,000 cigarettes that bear no 

evidence of the payment of applicable 

state tax. 

The legislative history of the CCTA 

and ATF’s investigative efforts over the 

years have established that organized 

crime has been involved in the 

diversion of legal tobacco products into 

the illegal market. Moreover, several 

investigations by ATF and its law 

enforcement partners have established 

links to international terrorist groups, 

including Hezbollah and al Qaeda. 

Since the enactment of the CCTA, 

cigarette smuggling has grown in 

complexity. Not only are cigarettes 

smuggled between low-tax and high-tax 

States, they are smuggled through 

international borders. The 

counterfeiting of legitimate brands is 

also very prevalent. The trafficking of 

contraband cigarettes is a worldwide 

problem. Billions of dollars of tax 

revenue are lost by all levels of 

government throughout the world due 

to the smuggling of cigarettes. Much of 

the illicit profit gained by organized 

crime and terrorist groups is used in 

furtherance of their criminal enterprises. 

The trafficking in counterfeit and 

contraband tobacco products also poses 

a serious health risk to our society. 

There are no standards of production in 

counterfeit product. This allows for 

such things as biological or chemical 

contamination of the product. 

Furthermore, contraband cigarettes are 

more likely to be sold to underage 

persons than legitimate product. 

Finally, the sale of counterfeit and 

contraband products poses a serious 

financial threat to legitimate 

manufacturers, wholesalers, and 

retailers. 

II. USA PATRIOT Improvement and 

Reauthorization Act of 2005—Proposed 

Rule 

Public Law 109–177 (120 Stat. 192), 

the USA PATRIOT Improvement and 

Reauthorization Act of 2005 (‘‘the Act’’), 

was enacted on March 9, 2006. Section 

121 of the Act made several 

amendments to the CCTA, 18 U.S.C. 

2341 et seq. The provisions of section 

121 and the proposed implementing 

regulations (if applicable), are discussed 

in the following paragraphs. 

Section 121(a)—Threshold Quantity for 

Treatment as Contraband Cigarettes 

Prior to amendment, section 2342 of 

the CCTA made it unlawful for any 

person knowingly to ship, transport, 

receive, possess, sell, distribute, or 

purchase contraband cigarettes. 

Contraband cigarettes were defined as 

any quantity in excess of 60,000 

cigarettes that bear no evidence of the 

payment of applicable state tax. Section 

121(a) of the Act amended the CCTA by 

reducing the number of cigarettes that 

trigger application of the CCTA from a 

quantity in excess of 60,000 to a 

quantity in excess of 10,000 and which 

bear no evidence of the payment of 

applicable state or local tax, if the States 

or local governments require such 

indicia of tax payment. 

Proposed amendments to the 

regulations to reflect the statutorily 

imposed reduction to the CCTA 

threshold are contained in 27 CFR 

646.141, 646.143, 646.146, and 646.147. 

The Department is also proposing to 

amend § 646.143 by adding a definition 

for the term ‘‘cigarette.’’ The proposed 

definition reflects the meaning of the 

term set forth in the CCTA as amended, 

i.e., to update the existing regulatory 

language to conform to the statutory 

change. 

Section 121(b)—Contraband Smokeless 

Tobacco 

Section 121(b) amended the CCTA by 

extending its provisions to include 

contraband smokeless tobacco and by 

defining the terms ‘‘smokeless tobacco’’ 

and ‘‘contraband smokeless tobacco.’’ 

The term ‘‘smokeless tobacco’’ means 

any finely cut, ground, powdered, or 

leaf tobacco that is intended to be 

placed in the oral or nasal cavity or 

otherwise consumed without being 

combusted. The term ‘‘contraband 

smokeless tobacco’’ means a quantity in 

excess of 500 single-unit consumersized cans or packages of smokeless 

tobacco, or their equivalent, that are in 

the possession of any person other 

than— 

1. A person holding a permit issued 

pursuant to chapter 52 of the Internal 

Revenue Code of 1986 as manufacturer 

of tobacco products or as an export 

warehouse proprietor, a person 

operating a customs bonded warehouse 

pursuant to section 311 or 555 of the 

Tariff Act of 1930 (19 U.S.C. 1311, 

1555), or an agent of such person; 

2. A common carrier transporting 

such smokeless tobacco under a proper 

bill of lading or freight bill which states 

the quantity, source, and designation of 

such smokeless tobacco; 

3. A person who is licensed or 

otherwise authorized by the State where 

such smokeless tobacco is found to 

engage in the business of selling or 

distributing tobacco products, and has 

complied with the accounting, tax, and 

payment requirements relating to such 

license or authorization with respect to 

such smokeless tobacco; or 

4. An officer, employee, or agent of 

the United States or a State, or any 

department, agency, or instrumentality 

of the United States or a State (including 

any political subdivision of a State), 

having possession of such smokeless 

tobacco in connection with the 

performance of official duties. 

Proposed regulations that implement 

the provisions of section 121(b) are in 

27 CFR 646.143, 646.146, 646.147, and 

646.154. 

Section 121(c)—Recordkeeping, 

Reporting, and Inspection 

Section 121(c) of the Act amended the 

CCTA by: 

• Authorizing the Attorney General to 

prescribe regulations concerning 

additional recordkeeping requirements 

that he considers appropriate for 

purposes of enforcement of the CCTA 

on persons who ship, sell, or distribute 

more than 10,000 cigarettes or 500 

single-unit consumer-sized cans or 

packages of smokeless tobacco in a 

single transaction. 

• Requiring persons, except for tribal 

governments, who engage in a delivery 

sale, and who ship, sell, or distribute 

more than 10,000 cigarettes or 500 

single-unit consumer-sized cans or 

packages of smokeless tobacco within a 

single month, to submit to the Attorney 

General a report that sets forth the 

following: 

1. The person’s beginning and ending 

inventory of cigarettes and cans or 

packages of smokeless tobacco (in total) 

for such month. 

2. The total quantity of cigarettes and 

cans or packages of smokeless tobacco 

that the person received within such 

month from each other person (itemized 

by name and address). 

3. The total quantity of cigarettes and 

cans or packages of smokeless tobacco 

that the person distributed within such 

month to each person (itemized by 

name and address) other than a retail 

purchaser. 

• Adding the term ‘‘delivery sale,’’ 

which means any sale of cigarettes or 

smokeless tobacco in interstate 

commerce to a consumer if— 


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(a) The consumer submits the order 

for such sale by means of a telephone 

or other method of voice transmission, 

the mails, or the Internet or other online 

service, or by any other means where 

the consumer is not in the same 

physical location as the seller when the 

purchase or offer of sale is made; or 

(b) The cigarettes or smokeless 

tobacco are delivered by use of the 

mails, common carrier, private delivery 

service, or any other means where the 

consumer is not in the same physical 

location as the seller when the 

consumer obtains physical possession of 

the cigarettes or smokeless tobacco. 

Proposed regulations that reflect the 

new CCTA requirements regarding 

contraband smokeless tobacco are in 27 

CFR 646.143 and 646.146. The 

regulatory language is identical to the 

statutory language. 

• Specifying that any report required 

to be submitted under the CCTA to the 

Attorney General must also be 

submitted to the Secretary of the 

Treasury and to the attorneys general 

and the tax administrators of the States 

from where the shipments, deliveries, or 

distributions both originated and 

concluded. 

Proposed regulations that reflect the 

new CCTA requirements regarding 

contraband smokeless tobacco are in 27 

CFR 646.146. The regulatory language is 

identical to the statutory language. 

Section 121(d)—Disposal or Use of 

Forfeited Cigarettes and Smokeless 

Tobacco 

Pursuant to section 121(d) of the Act, 

any contraband cigarettes or contraband 

smokeless tobacco involved in any 

violation of the CCTA will be subject to 

seizure and forfeiture and will be either 

(1) destroyed and not resold, or (2) used 

for undercover investigative operations 

for the detection and prosecution of 

crimes, and then destroyed and not 

resold. 

Proposed regulations that implement 

this new CCTA provision are in 27 CFR 

646.155. The regulatory language is 

identical to the statutory language. 

Section 121(e)—Effect on State and 

Local Law 

Section 121(e) of the Act amended the 

CCTA to make it clear that the CCTA is 

not intended to affect the concurrent 

jurisdiction of a state or local 

government to enact and enforce its own 

cigarette tax laws, to provide for the 

confiscation of cigarettes or smokeless 

tobacco and other property seized for 

violation of such laws, and to provide 

for penalties for the violation of such 

laws. This section also amended the 

CCTA to make it clear that the CCTA is 

not intended to inhibit or otherwise 

affect any coordinated law enforcement 

effort by a number of state or local 

governments, through interstate 

compact or otherwise, to provide for the 

administration of state or local cigarette 

tax laws, to provide for the confiscation 

of cigarettes or smokeless tobacco and 

other property seized in violation of 

such laws, and to establish cooperative 

programs for the administration of such 

laws. This statutory change does not 

necessitate any amendments to these 

regulations. 

Section 121(f)—Enforcement 

Section 121(f) of the Act creates a new 

civil cause of action allowing state and 

local governments and federal tobacco 

permittees under the Internal Revenue 

Code to prevent or restrain CCTA 

violations in Federal district court. In 

addition, these entities could also seek 

civil penalties and monetary damages, 

and injunctive or equitable relief. This 

statutory change does not necessitate 

any amendments to these regulations. 

Section 121(g)—Conforming and 

Clerical Amendments 

Section 121(g) made several 

conforming and clerical amendments to 

the CCTA (e.g., a change in the title of 

chapter 114 and a change in the section 

headings of sections 2343 and 2345) that 

do not necessitate any regulatory 

changes. This statutory change does not 

necessitate any amendments to these 

regulations. 

III. Miscellaneous Amendment of the 

Regulations 

In general, the regulations at 27 CFR 

646.150 provide that each distributor of 

cigarettes must retain the records 

required by §§ 646.146 and 646.147 for 

three years following the close of the 

year in which the records are made. The 

distributor must keep the required 

records on his business premises. ATF 

is considering extending the record 

retention requirement to five years. The 

amendment would harmonize the 

regulations with the applicable statute 

of limitations for CCTA violations, 

which is five years. ATF is soliciting 

comments on this issue. 

How This Document Complies With the 

Federal Administrative Requirements 

for Rulemaking 

A. Executive Order 12866 

This proposed rule has been drafted 

and reviewed in accordance with 

Executive Order 12866, ‘‘Regulatory 

Planning and Review’’ section 1(b), The 

Principles of Regulation. The 

Department of Justice has determined 

that this proposed rule is a ‘‘significant 

regulatory action’’ under Executive 

Order 12866, section 3(f), Regulatory 

Planning and Review, and accordingly 

this proposed rule has been reviewed by 

the Office of Management and Budget. 

However, this proposed rule will not 

have an annual effect on the economy 

of $100 million, and will not adversely 

affect in a material way the economy, a 

sector of the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or state, local, or 

tribal governments or communities. 

Accordingly, this proposed rule is not 

an ‘‘economically significant’’ 

rulemaking as defined by Executive 

Order 12866. The proposed information 

requirements are contained in records 

that are kept in the normal course of 

business. Likewise, the reporting 

requirements contained in this proposed 

rule merely augment existing federal 

law as set forth in the Jenkins Act, 15 

U.S.C. 375. 

B. Executive Order 13132 

This proposed rule will not have 

substantial direct effects on the States, 

on the relationship between the 

National Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. Therefore, in 

accordance with section 6 of Executive 

Order 13132, the Attorney General has 

determined that this proposed 

regulation does not have sufficient 

federalism implications to warrant the 

preparation of a federalism summary 

impact statement. 

C. Executive Order 12988 

This proposed rule meets the 

applicable standards set forth in 

sections 3(a) and 3(b)(2) of Executive 

Order 12988. 

D. Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) requires an agency to 

conduct a regulatory flexibility analysis 

of any rule subject to notice and 

comment rulemaking requirements 

unless the head of the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small not-forprofit enterprises, and small 

governmental jurisdictions. The 

Attorney General has reviewed this 

proposed regulation and, by approving 

it, certifies that this proposed rule will 

not have a significant economic impact 

on a substantial number of small 

entities. The proposed requirements 

apply only to entities that sell the 

threshold quantities of cigarettes or 

smokeless tobacco in a single 


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44176 Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Proposed Rules 

transaction. In addition, the proposed 

information requirements are contained 

in the records that are kept in the 

normal course of business and the 

proposed reporting requirements merely 

augment existing federal law as set forth 

in the Jenkins Act, 15 U.S.C. 375. 

ATF estimates that this proposed rule 

will have an impact on no more than 

3,000 businesses with the majority of 

those being small businesses. ATF 

further estimates that the annual 

economic impact will be less than 

$700,000 per year. ATF estimates for 

this proposed rule are as follows: 

Mailing Costs (stamp and envelope): 

$.50 × 3,000 businesses × 12 months = 

$180,000. 

Labor Costs: One hour of labor 

($13.50/hr) for filling out ATF F 

5200.XX, filing and mailing × 3,000 × 12 

= $486,000. 

E. Small Business Regulatory 

Enforcement Fairness Act of 1996 

This proposed rule is not a major rule 

as defined by section 251 of the Small 

Business Regulatory Enforcement Act of 

1996 (5 U.S.C. 804). This proposed rule 

will not result in an annual effect on the 

economy of $100 million or more; a 

major increase in costs or prices; or 

significant adverse effects on 

competition, employment, investment, 

innovation, or on the ability of United 

States-based companies to compete with 

foreign-based companies in domestic 

and export markets. 

F. Unfunded Mandates Reform Act of 

1995 

This proposed rule will not result in 

the expenditure by state, local, and 

tribal governments, in the aggregate, or 

by the private sector of $100 million or 

more in any one year, and it will not 

significantly or uniquely affect small 

governments. Therefore, no actions were 

deemed necessary under the provisions 

of the Unfunded Mandates Reform Act 

of 1995. 

G. Paperwork Reduction Act 

The collections of information 

contained in this notice of proposed 

rulemaking have been submitted to the 

Office of Management and Budget for 

review in accordance with the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3507(d)). Comments on the 

collections of information should be 

sent to the Office of Management and 

Budget, Attention: Desk Officer for the 

Bureau of Alcohol, Tobacco, Firearms, 

and Explosives, Office of Information 

and Regulatory Affairs, Washington, DC 

20503, with copies to the Chief, 

Document Services Branch, Bureau of 

Alcohol, Tobacco, Firearms, and 

Explosives, at the address previously 

specified. Comments are specifically 

requested concerning: 

• Whether the proposed collections of 

information are necessary for the proper 

performance of the functions of the 

Bureau of Alcohol, Tobacco, Firearms, 

and Explosives, including whether the 

information will have practical utility; 

• The accuracy of the estimated 

burden associated with the proposed 

collections of information (see below); 

• How the quality, utility, and clarity 

of the information to be collected may 

be enhanced; and 

• How the burden of complying with 

the proposed collections of information 

may be minimized, including through 

the application of automated collection 

techniques or other forms of information 

technology. 

The collections of information in this 

proposed regulation are in 27 CFR 

646.146, 646.147, and 646.150. This 

information is required to implement 

the provisions of the USA PATRIOT 

Improvement and Reauthorization Act 

of 2005 regarding trafficking in 

contraband cigarettes or smokeless 

tobacco. The likely respondents are 

businesses. 

Estimated total annual reporting and/ 

or recordkeeping burden: 36,000 hours. 

Estimated average burden hours per 

respondent and/or recordkeeper: 12 

hours. 

Estimated number of respondents 

and/or recordkeepers: 3,000. 

Estimated annual frequency of 

responses: 12. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a valid control 

number assigned by the Office of 

Management and Budget. 

Public Participation 

A. Comments Sought 

ATF is requesting comments on the 

proposed regulations from all interested 

persons. ATF is also specifically 

requesting comments on the clarity of 

this proposed rule and how it may be 

made easier to understand. All 

comments must reference this document 

docket number (ATF 22P), be legible, 

and include your name and mailing 

address. ATF will treat all comments as 

originals and it will not acknowledge 

receipt of comments. 

Comments received on or before the 

closing date will be carefully 

considered. Comments received after 

that date will be given the same 

consideration if it is practical to do so, 

but assurance of consideration cannot 

be given except as to comments received 

on or before the closing date. 

B. Confidentiality 

Comments, whether submitted 

electronically or in paper, will be made 

available for public viewing at ATF, and 

on the Internet as part of the President’s 

eRulemaking initiative, and are subject 

to the Freedom of Information Act. 

Commenters who do not want their 

name or other personal identifying 

information posted on the Internet 

should submit their comment by mail or 

facsimile, along with a separate cover 

sheet that contains their personal 

identifying information. Both the cover 

sheet and comment must reference this 

docket number. Information contained 

in the cover sheet will not be posted on 

the Internet. Any personal identifying 

information that appears within the 

comment will be posted on the Internet 

and will not be redacted by ATF. 

Any material that the commenter 

considers to be inappropriate for 

disclosure to the public should not be 

included in the comment. Any person 

submitting a comment shall specifically 

designate that portion (if any) of his 

comments that contains material that is 

confidential under law (e.g., trade 

secrets, processes, etc.). Any portion of 

a comment that is confidential under 

law shall be set forth on pages separate 

from the balance of the comment and 

shall be prominently marked 

‘‘confidential’’ at the top of each page. 

Confidential information will be 

included in the rulemaking record but 

will not be disclosed to the public. Any 

comments containing material that is 

not confidential under law may be 

disclosed to the public. In any event, the 

name of the person submitting a 

comment is not exempt from disclosure. 

C. Submitting Comments 

Comments may be submitted in any of 

three ways: 

• Mail: Send written comments to 

ATF at the address listed in the 

ADDRESSES section of this document. 

Written comments must appear in a 

minimum 12-point size of type (.17 

inches), include your mailing address, 

be signed, and may be of any length. 

• Facsimile: You may submit 

comments by facsimile transmission to 

202–648–9741. Faxed comments must: 

(1) Be legible; 

(2) Be on 81⁄2 ′′ x 11′′ paper; 

(3) Contain a legible, written 

signature; and 

(4) Be no more than five pages long. 

ATF will not accept faxed comments 

that exceed five pages. 

• Federal eRulemaking Portal: To 

submit comments to ATF via the 

Federal eRulemaking portal, visit 

http://www.regulations.gov and follow 


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the instructions for submitting 

comments. 

D. Request for Hearing 

Any interested person who desires an 

opportunity to comment orally at a 

public hearing should submit his or her 

request, in writing, to the Director of 

ATF within the 90-day comment period. 

The Director, however, reserves the 

right to determine, in light of all 

circumstances, whether a public hearing 

is necessary. 

Disclosure 

Copies of this proposed rule and the 

comments received will be available for 

public inspection by appointment 

during normal business hours at: ATF 

Reading Room, Room 1E–063, 99 New 

York Avenue, NE., Washington, DC 

20226; telephone: (202) 648–7080. 

Drafting Information 

The author of this document is James 

P. Ficaretta; Enforcement Programs and 

Services; Bureau of Alcohol, Tobacco, 

Firearms, and Explosives. 

List of Subjects in 27 CFR Part 646 

Administrative practice and 

procedure, Authority delegations, Cigars 

and cigarettes, Claims, Excise taxes, 

Packaging and containers, Penalties, 

Reporting and recordkeeping 

requirements, Seizures and forfeitures, 

Smokeless tobacco, Surety bonds, 

Tobacco. 

Authority and Issuance 

Accordingly, for the reasons 

discussed in the preamble, 27 CFR Part 

646 is proposed to be amended as 

follows: 

PART 646—CONTRABAND 

CIGARETTES AND SMOKELESS 

TOBACCO 

1. The authority citation for 27 CFR 

part 646 continues to read as follows: 

Authority: 18 U.S.C. 2341–2346. 

2. Section 646.141 is revised to read 

as follows: 

§ 646.141 Scope of part. 

The regulations in this subpart relate 

to the distribution of cigarettes in excess 

of 10,000 and smokeless tobacco in 

excess of 500 single-unit consumersized cans or packages in a single 

transaction. 

3. Section 646.143 is amended by 

revising the definitions for ‘‘Business 

premises,’’ ‘‘Contraband cigarettes,’’ 

‘‘Disposition,’’ ‘‘Distributor,’’ and 

‘‘Exempted person’’ and by adding 

definitions for the terms ‘‘Cigarette,’’ 

‘‘Contraband smokeless tobacco,’’ 

‘‘Delivery sale,’’ ‘‘Interstate commerce,’’ 

and ‘‘Smokeless tobacco’’ to read as 

follows: 

§ 646.143 Meaning of terms. 

* * * * * 

Business premises. When used with 

respect to a distributor, the property on 

which the cigarettes or smokeless 

tobacco are kept or stored. The business 

premises include the property where the 

records of a distributor are kept. 

Cigarette. (a) Any roll of tobacco 

wrapped in paper or in any substance 

not containing tobacco; and 

(b) Any roll of tobacco wrapped in 

any substance containing tobacco 

which, because of its appearance, the 

type of tobacco used in the filler, or its 

packaging and labeling, is likely to be 

offered to, or purchased by, consumers 

as a cigarette described in paragraph (a) 

of this definition. 

* * * * * 

Contraband cigarettes. Any quantity 

of cigarettes in excess of 10,000, if— 

(a) The cigarettes bear no evidence of 

the payment of applicable state or local 

cigarette taxes in the State or locality 

where such cigarettes are found; 

(b) The State or local government in 

which the cigarettes are found requires 

a stamp, impression, or other indication 

to be placed on packages or other 

containers of cigarettes to evidence 

payment of cigarette taxes; and 

(c) The cigarettes are in the possession 

of any person other than an exempted 

person. 

Contraband smokeless tobacco. Any 

quantity of smokeless tobacco in excess 

of 500 single-unit consumer-sized cans 

or packages, or their equivalent, that are 

in the possession of any person other 

than an exempted person. 

Delivery sale. Any sale of cigarettes or 

smokeless tobacco in interstate 

commerce to a consumer if— 

(a) The consumer submits the order 

for such sale by means of a telephone 

or other method of voice transmission, 

the mails, or the Internet or other online 

service, or by any other means where 

the consumer is not in the same 

physical location as the seller when the 

purchase or offer of sale is made; or 

(b) The cigarettes or smokeless 

tobacco are delivered by use of the 

mails, common carrier, private delivery 

service, or any other means where the 

consumer is not in the same physical 

location as the seller when the 

consumer obtains physical possession of 

the cigarettes or smokeless tobacco. 

Disposition. The movement of 

cigarettes or smokeless tobacco from a 

person’s business premises, wherever 

situated, by shipment or other means of 

distribution. 

* * * * * 

Distributor. Any person who 

distributes more than 10,000 cigarettes, 

or smokeless tobacco in excess of 500 

single-unit consumer-sized cans or 

packages, in a single transaction. 

Exempted person. (a) With respect to 

cigarettes in excess of 10,000, any 

person who is— 

(1) Holding a permit issued pursuant 

to chapter 52 of the Internal Revenue 

Code of 1954 as a manufacturer of 

tobacco products or as an export 

warehouse proprietor; 

(2) Operating a customs bonded 

warehouse pursuant to section 311 or 

555 of the Tariff Act of 1930 (19 U.S.C. 

1311 or 1555); 

(3) An agent of a tobacco products 

manufacturer, an export warehouse 

proprietor, or an operator of a customs 

bonded warehouse; 

(4) A common or contract carrier 

transporting the cigarettes involved 

under a proper bill of lading or freight 

bill which states the quantity, source, 

and destination of the cigarettes; 

(5) Licensed or otherwise authorized 

by the State, in which he possesses 

cigarettes, to account for and pay 

cigarette taxes imposed by that State; 

and who has complied with the 

accounting and payment requirements 

relating to his license or authorization 

with respect to the cigarettes involved; 

or 

(6) An officer, employee, or agent of 

the United States, of an individual State, 

or of a political subdivision of a State 

and having possession of cigarettes in 

connection with the performance of 

official duties. 

(7) Operating within a foreign-trade 

zone established under 19 U.S.C., 

section 81b, when the cigarettes 

involved have been entered into the 

zone under zone-restricted status or, in 

respect to foreign cigarettes, have been 

admitted into the zone but have not 

been entered in the United States. 

(b) With respect to smokeless tobacco 

in excess of 500 single-unit consumersized cans or packages, any person who 

is— 

(1) Holding a permit issued pursuant 

to chapter 52 of the Internal Revenue 

Code of 1986 as manufacturer of tobacco 

products or as an export warehouse 

proprietor, a person operating a customs 

bonded warehouse pursuant to section 

311 or 555 of the Tariff Act of 1930 (19 

U.S.C. 1311, 1555), or an agent of such 

person; 

(2) A common or contract carrier 

transporting such smokeless tobacco 

under a proper bill of lading or freight 


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bill which states the quantity, source, 

and designation of such smokeless 

tobacco; 

(3) Licensed or otherwise authorized 

by the State where such smokeless 

tobacco is found to engage in the 

business of selling or distributing 

tobacco products; and who has 

complied with the accounting, tax, and 

payment requirements relating to such 

license or authorization with respect to 

such smokeless tobacco; or 

(4) An officer, employee, or agent of 

the United States, of an individual State, 

or of a political subdivision of a State 

and having possession of such 

smokeless tobacco in connection with 

the performance of official duties. 

Interstate commerce. Commerce 

between a State and any place outside 

the State, or commerce between points 

in the same State but through any place 

outside the State. 

* * * * * 

Smokeless tobacco. Any finely cut, 

ground, powdered, or leaf tobacco that 

is intended to be placed in the oral or 

nasal cavity or otherwise consumed 

without being combusted. 

* * * * * 

4. The centered heading preceding 

section 646.146 is revised to read as 

‘‘Records and Reports.’’ 

5. Sections 646.146 and 646.147 are 

revised to read as follows: 

§ 646.146 General requirements. 

(a) Each distributor of cigarettes or 

smokeless tobacco shall keep copies of 

invoices, bills of lading, or other 

suitable commercial records equivalent 

thereto relating to each disposition of 

more than 10,000 cigarettes or 

smokeless tobacco in excess of 500 

single-unit consumer-sized cans or 

packages. Dividing a single agreement 

for the disposition of more than 10,000 

cigarettes or smokeless tobacco in 

excess of 500 single-unit consumersized cans or packages into the delivery 

of smaller components of 10,000 

cigarettes or less or smokeless tobacco of 

not more than 500 single-unit 

consumer-sized cans or packages does 

not exempt the distributor from the 

recordkeeping requirements of this part. 

The distributor shall include the 

information prescribed in § 646.147 in 

his commercial records of disposition. 

(b)(1) Except for a tribal government, 

each distributor who engages in a 

delivery sale, and who ships, sells, or 

distributes cigarettes in excess of 

10,000, or smokeless tobacco in excess 

of 500 single-unit consumer-sized cans 

or packages, or their equivalent, within 

a single month, shall prepare and 

submit to the Director ATF Form 

5200.XX, in accordance with the 

instructions on the form. Form 5200.XX 

shall include the following information: 

(i) The distributor’s beginning and 

ending inventory of cigarettes and cans 

or packages of smokeless tobacco (in 

total) for such month. 

(ii) The total quantity of cigarettes and 

cans or packages of smokeless tobacco 

that the distributor received within such 

month from each other distributor 

(itemized by name and address). 

(iii) The total quantity of cigarettes 

and cans or packages of smokeless 

tobacco that was distributed within 

such month to each person (itemized by 

name and address) other than a retail 

purchaser. 

(2) A copy of completed ATF Form 

5200.XX shall also be submitted by each 

distributor described in paragraph (b)(1) 

of this section to the Secretary of the 

Treasury and to the attorneys general 

and the tax administrators of the States 

from where the shipments, deliveries, or 

distributions both originated and 

concluded. 

§ 646.147 Required information. 

(a) Distributors who are exempted 

persons. Each distributor who is an 

exempted person as defined in 

§ 646.143 shall show the following 

information in his commercial records. 

(1) For each disposition of more than 

10,000 cigarettes or smokeless tobacco 

in excess of 500 single-unit consumersized cans or packages to an exempted 

person; or for each disposition of more 

than 10,000 cigarettes or smokeless 

tobacco in excess of 500 single-unit 

consumer-sized cans or packages to a 

person who is not an exempted person 

and which is delivered by the 

distributor to the recipient’s place of 

business, the distributor shall show on 

dated records— 

(i) The full name of the purchaser (or 

the recipient if there is no purchaser); 

(ii) The street address (including city 

and state) to which the cigarettes or 

smokeless tobacco are destined; and 

(iii) The quantity of cigarettes or 

smokeless tobacco disposed of. 

(2) For each disposition of more than 

10,000 cigarettes or smokeless tobacco 

in excess of 500 single-unit consumersized cans or packages, other than the 

dispositions specified in paragraph 

(a)(1) of this section, the distributor 

shall show on dated records— 

(i) The full name of the purchaser (if 

any); 

(ii) The name, address (including city 

and state), and signature of the person 

receiving the cigarettes or smokeless 

tobacco; 

(iii) The street address (including city 

and state) to which the cigarettes or 

smokeless tobacco are destined; 

(iv) The quantity of cigarettes or 

smokeless tobacco disposed of; 

(v) The driver’s license number of the 

individual receiving the cigarettes or 

smokeless tobacco; 

(vi) The license number of the vehicle 

in which the cigarettes or smokeless 

tobacco are removed from the 

distributor’s business premises; 

(vii) A declaration by the individual 

receiving the cigarettes or smokeless 

tobacco of the specific purpose of 

receipt (such as personal use, resale, 

delivery to another person, etc.); and 

(viii) A declaration by the person 

receiving the cigarettes or smokeless 

tobacco of the name and address of his 

principal when he is acting as an agent. 

(b) Distributors who are not exempted 

persons. Each distributor who is not an 

exempted person as defined in 

§ 646.143 shall show on dated 

commercial records the information 

specified in paragraphs (a)(2)(i) through 

(viii) of this section for each disposition 

of more than 10,000 cigarettes or 

smokeless tobacco in excess of 500 

single-unit consumer-sized cans or 

packages. 

6. Section 646.150 is amended by 

revising paragraph (b)(2) to read as 

follows: 

§ 646.150 Retention of records. 

* * * * * 

(b) * * * 

(2) The tobacco products 

manufacturer will keep the required 

record for each disposition of more than 

10,000 cigarettes or smokeless tobacco 

in excess of 500 single-unit consumersized cans or packages from the agent’s 

premises for the full retention period 

specified in paragraph (a) of this 

section; and 

* * * * * 

§ 646.154 [Amended] 

7. Section 646.154(a) is amended by 

adding ‘‘or contraband smokeless 

tobacco’’ after ‘‘contraband cigarettes’’. 

8. Section 646.155 is revised to read 

as follows: 

§ 646.155 Forfeitures. 

(a) Any contraband cigarettes or 

contraband smokeless tobacco involved 

in any violation of the provisions of 18 

U.S.C. chapter 114 shall be subject to 

seizure and forfeiture. The provisions of 

18 U.S.C. chapter 46 relating to civil 

forfeitures shall extend to any seizure or 

civil forfeiture under this section. Any 

cigarettes or smokeless tobacco so 

seized and forfeited shall be either— 

(1) Destroyed and not resold; or 

(2) Used for undercover investigative 

operations for the detection and 

prosecution of crimes, and then 

destroyed and not resold. 


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Federal Register / Vol. 75, No. 144 / Wednesday, July 28, 2010 / Proposed Rules 44179 

(b) Any vessel, vehicle, or aircraft 

used to transport, carry, convey, or 

conceal or possess any contraband 

cigarettes or contraband smokeless 

tobacco with respect to which there has 

been committed any violation of any 

provision of 18 U.S.C. chapter 114 or 

the regulations in this subpart shall be 

subject to seizure and forfeiture 

pursuant to 49 U.S.C. 80302–80303. The 

provisions of 18 U.S.C. chapter 46 

relating to civil forfeitures shall extend 

to any seizure or civil forfeiture under 

this section. 

Dated: July 22, 2010. 

Eric H. Holder, Jr., 

Attorney General. 

[FR Doc. 2010–18552 Filed 7–27–10; 8:45 am] 

BILLING CODE 4410–FY–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R01–OAR–2010–0459; A–1–FRL– 

9182–6] 

Approval and Promulgation of Air 

Quality Implementation Plans; Rhode 

Island; Determination of Attainment of 

the 1997 Ozone Standard for the 

Providence, RI Area 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The EPA is proposing to 

determine that the Providence (All of 

Rhode Island) moderate 1997 8-hour 

ozone nonattainment area continues to 

attain the 1997 8-hour National Ambient 

Air Quality Standard (NAAQS) for 

ozone. This determination is based 

upon complete, quality-assured, 

certified ambient air monitoring data 

that show the area has monitored 

attainment of the 1997 8-hour ozone 

NAAQS for the 2007–2009 monitoring 

period. Preliminary data available 

through June 15, 2010 also are 

consistent with continued attainment. 

In addition, in accordance with the 

Clean Air Act, EPA is proposing to 

determine, that this area has attained 

the 1997 ozone NAAQS as of June 15, 

2010, its applicable attainment date. 

DATES: Written comments must be 

received on or before August 27, 2010. 

ADDRESSES: Submit your comments, 

identified by Docket ID Number EPA– 

R01–OAR–2010–0459 by one of the 

following methods: 

1. http://www.regulations.gov: Follow 

the on-line instructions for submitting 

comments. 

2. E-mail: arnold.anne@epa.gov 

3. Fax: (617) 918–0047. 

4. Mail: ‘‘Docket Identification 

Number EPA–R01–OAR–2010–0459,’’ 

Anne Arnold, U.S. Environmental 

Protection Agency, EPA New England 

Regional Office, 5 Post Office Square, 

Suite 100 (mail code: OEP05–2), Boston, 

MA 02109–3912. 

5. Hand Delivery or Courier. Deliver 

your comments to: Anne Arnold, 

Manager, Air Quality Planning Unit, 

Office of Ecosystem Protection, 

U.S. Environmental Protection Agency, 

EPA New England Regional Office, 5 

Post Office Square, Suite 100, Boston, 

MA 02109–3912. Such deliveries are 

only accepted during the Regional 

Office’s normal hours of operation. The 

Regional Office’s official hours of 

business are Monday through Friday, 

8:30 a.m. to 4:30 p.m., excluding legal 

holidays. 

Instructions: Direct your comments to 

Docket ID No. EPA–R01–OAR–2010– 

0459. EPA’s policy is that all comments 

received will be included in the public 

docket without change and may be 

made available online at http:// 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit through http:// 

www.regulations.gov, or e-mail, 

information that you consider to be CBI 

or otherwise protected. The http:// 

www.regulations.gov Web site is an 

‘‘anonymous access’’ system, which 

means EPA will not know your identity 

or contact information unless you 

provide it in the body of your comment. 

If you send an e-mail comment directly 

to EPA without going through http:// 

www.regulations.gov your e-mail 

address will be automatically captured 

and included as part of the comment 

that is placed in the public docket and 

made available on the Internet. If you 

submit an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. 

Docket: All documents in the 

electronic docket are listed in the 

http://www.regulations.gov index. 

Although listed in the index, some 

information is not publicly available, 

i.e., CBI or other information whose 

disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, is not placed on 

the Internet and will be publicly 

available only in hard copy form. 

Publicly available docket materials are 

available either electronically in http:// 

www.regulations.gov or in hard copy at 

Office of Ecosystem Protection, U.S. 

Environmental Protection Agency, EPA 

New England Regional Office, 5 Post 

Office Square, Suite 100, Boston, MA. 

EPA requests that if at all possible, you 

contact the person listed in the FOR

FURTHER INFORMATION CONTACT section to 

schedule your inspection. The Regional 

Office’s official hours of business are 

Monday through Friday, 8:30 a.m. to 

4:30 p.m., excluding legal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Richard P. Burkhart, Air Quality 

Planning Unit, U.S. Environmental 

Protection Agency, EPA New England 

Regional Office, 5 Post Office Square, 

Suite 100, Boston, MA 02109–3912, 

telephone number (617) 918–1664, fax 

number (617) 918–0664, e-mail 

Burkhart.Richard@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Throughout this document whenever 

‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean 

EPA. 

Organization of this document. The 

following outline is provided to aid in 

locating information in this preamble. 

I. What actions is EPA taking? 

II. What is the effect of these actions? 

III. What is the background for these actions? 

IV. What is EPA’s analysis of the relevant air 

quality data? 

V. Proposed Actions 

VI. Statutory and Executive Order Reviews 

I. What actions is EPA taking? 

EPA is proposing to determine that 

the Providence (All of Rhode Island) 

moderate 8-hour ozone nonattainment 

area continues to attain the 1997 8-hour 

NAAQS for ozone. This determination 

is based upon complete, quality-assured 

and certified ambient air monitoring 

data that show the area has monitored 

attainment of the 1997 ozone NAAQS 

for the 2007–2009 monitoring period. 

Preliminary data available through June 

15, 2010 are also consistent with 

continued attainment. In addition, 

under section 181(b)(2)(A) of the Clean 

Air Act (CAA), EPA is proposing to 

determine that this area has attained the 

1997 ozone NAAQS by its applicable 

attainment date (June 15, 2010). 

II. What is the effect of these actions? 

Under section 181(b)(2)(A) of the CAA 

and the provisions of EPA’s ozone 

implementation rule (see 40 CFR 

Section 51.902(a)), EPA is proposing to 

determine that this area has attained the 


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