I 
109TH CONGRESS 
1ST SESSION H. R. 1377 
To amend the Internal Revenue Code of 1986 to deter the smuggling of 
tobacco products into the United States, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 17, 2005 
Mr. DOGGETT (for himself, Mr. ABERCROMBIE, Mr. ACKERMAN, Mr. ALLEN, 
Mr. ANDREWS, Ms. BALDWIN, Mr. BECERRA, Mr. BERMAN, Mr. 
BLUMENAUER, Mr. BROWN of Ohio, Mrs. CAPPS, Mr. CAPUANO, Mr. 
CONYERS, Mr. CROWLEY, Mr. DAVIS of Illinois, Mrs. DAVIS of California, 
Mr. DEFAZIO, Ms. DEGETTE, Mr. DELAHUNT, Ms. DELAURO, Ms. 
ESHOO, Mr. EVANS, Mr. FARR, Mr. FILNER, Mr. FRANK of Massachu-
setts, Mr. GENE GREEN of Texas, Mr. GRIJALVA, Mr. GUTIERREZ, Mr. 
HINCHEY, Mr. HINOJOSA, Mr. HOLT, Mr. HONDA, Ms. HOOLEY, Mr. 
JACKSON of Illinois, Ms. JACKSON-LEE of Texas, Ms. EDDIE BERNICE 
JOHNSON of Texas, Ms. KAPTUR, Mr. KENNEDY of Rhode Island, Ms. 
KILPATRICK of Michigan, Mr. KIND, Mr. KUCINICH, Mr. LANGEVIN, Mr. 
LANTOS, Ms. LEE, Mr. LEVIN, Mr. LEWIS of Georgia, Mr. LIPINSKI, Ms. 
ZOE LOFGREN of California, Mr. LYNCH, Mrs. MALONEY, Mr. MARKEY, 
Mr. MATHESON, Mrs. MCCARTHY, Mr. MCDERMOTT, Mr. MCGOVERN, 
Mr. MCNULTY, Mr. MEEHAN, Mr. MEEKS
of New York, Ms. 
MILLENDER-MCDONALD, Mr. GEORGE MILLER of California, Mr. NAD-
LER, Mrs. NAPOLITANO, Mr. NEAL of Massachusetts, Mr. OBERSTAR, 
Mr. OLVER, Mr. OWENS, Mr. PALLONE, Mr. PASCRELL, Mr. PLATTS, 
Mr. ROTHMAN, Ms. ROYBAL-ALLARD, Mr. RUSH, Mr. RYAN of Ohio, Ms. 
LINDA T. SA´NCHEZ of California, Ms. LORETTA SANCHEZ of California, 
Mr. SANDERS, Ms. SCHAKOWSKY, Mr. SCHIFF, Mr. SERRANO, Mr. SHER-
MAN, Ms. SLAUGHTER, Mr. SNYDER, Ms. SOLIS, Mr. STARK, Mrs. 
TAUSCHER, Mr. TIERNEY, Mrs. JONES of Ohio, Mr. UDALL of New Mex-
ico, Mr. VAN HOLLEN, Ms. VELA´ZQUEZ, Ms. WATERS, Ms. WATSON, Mr. 
WAXMAN, Mr. WEINER, Ms. WOOLSEY, and Mr. WU) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committee on the Judiciary, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
of such provisions as fall within the jurisdiction of the committee con-
cerned
A BILL 
To amend the Internal Revenue Code of 1986 to deter the 
smuggling of tobacco products into the United States, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Smuggled Tobacco 
Prevention Act of 2005’’. 
TITLE I—AMENDMENTS TO IN-
TERNAL REVENUE CODE OF 
1986 
SEC. 101. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this title an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
SEC. 102. IMPROVED MARKING AND LABELING; EXPORT 
BONDS. 
(a) IN GENERAL.—Subsection (b) of section 5723 
(relating to marks, labels, and notices) is amended— 
(1) by striking ‘‘, if any,’’ and
(2) by adding at the end the following: ‘‘Such 
marks, labels, and notices shall include marks and 
notices relating to the following: 
‘‘(1) IDENTIFICATION.—Each person who is a 
manufacturer or importer of tobacco products shall 
(in accordance with regulations prescribed by the 
Secretary) legibly print a unique serial number on 
all packages of tobacco products manufactured or 
imported by such person for sale or distribution. 
Such serial number shall be designed to enable the 
Secretary to identify the manufacturer of the prod-
uct (and, in the case of importation, the manufac-
turer and importer of the product), the location and 
date of manufacture (and, if imported, the location 
and date of importation), and any other information 
the Secretary determines necessary or appropriate 
for the proper administration of the chapter. The 
Secretary shall determine the size and location of 
the serial number. 
‘‘(2) 
MARKING
REQUIREMENTS
FOR
EX-
PORTS.—Each package of a tobacco product that is 
exported shall be marked for export from the United 
States and shall be marked as to the foreign country 
which is to be the final destination of such product. 
Such marking shall be visible and prominent and
shall be in English and in the primary language of 
such foreign country. The Secretary shall promul-
gate regulations to determine the size and location 
of the mark.’’. 
(b) SALES ON INDIAN RESERVATIONS; PACKAGE DE-
FINED.—Section 5723 is amended by adding at the end 
the following new subsections: 
‘‘(f) SALES ON INDIAN RESERVATIONS.—Each pack-
age of a tobacco product that is sold on an Indian reserva-
tion (as defined in section 403(9) of the Indian Child Pro-
tection and Family Violence Prevention Act (25 U.S.C. 
3202(9)) shall be visibly and prominently labeled as such. 
The Secretary, in consultation with the Secretary of the 
Interior, shall promulgate regulations with respect to such 
labeling, including requirements for the size and location 
of the label. 
‘‘(g) DEFINITION OF PACKAGE.—For purposes of 
this section, the term ‘package’ means the innermost 
sealed container visible from the outside of the individual 
container irrespective of the material from which such con-
tainer is made, in which a tobacco product is placed by 
the manufacturer and in which such tobacco product is 
offered for sale to a member of the general public.’’. 
(c) REQUIREMENTS
FOR TRACKING
OF TOBACCO 
PRODUCTS.—
(1) IN GENERAL.—Subchapter B of chapter 52 
is amended by adding at the end the following new 
section: 
‘‘SEC. 5714. EXPORT BONDS. 
‘‘(a) POSTING OF BOND.— 
‘‘(1) IN GENERAL.—It shall be unlawful for any 
person to export any tobacco product unless such 
person— 
‘‘(A) has posted with the Secretary a to-
bacco product bond in accordance with this sec-
tion for such product that contains a disclosure 
of the country to which such product will be ex-
ported; and 
‘‘(B) receives a written statement from the 
recipient of the tobacco products involved that 
such person— 
‘‘(i) will not knowingly and willfully 
violate or cause to be violated any law or 
regulation of such country, the United 
States, any State, the District of Colum-
bia, or any possession of the United States 
with respect to such products; and 
‘‘(ii) has never been convicted of any 
offense with respect to tobacco products.
‘‘(2) REGULATIONS.—The Secretary shall pro-
mulgate regulations that determine the frequency 
and the amount of each bond that must be posted 
under paragraph (1), but in no case shall such 
amount be less than an amount equal to the tax im-
posed under this chapter on the value of the ship-
ment of the products involved if such products were 
consumed within the United States. 
‘‘(3) EXPORT.—For purposes of this subsection, 
property shall be treated as exported if it is shipped 
to a foreign country, Puerto Rico, the Virgin Is-
lands, or a possession of the United States, or for 
consumption beyond the jurisdiction of the internal 
revenue laws of the United States. 
‘‘(b) RETURN OF BOND.—The Secretary shall return 
a bond posted under subsection (a)— 
‘‘(1) upon a determination by the Secretary 
(based on documentation provided by the person who 
posted the bond in accordance with regulations pro-
mulgated by the Secretary) that the items to which 
the bond applies have been received in the country 
of final destination as designated in the bond, or 
‘‘(2) under such other circumstance as the Sec-
retary may specify.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for such subchapter B is amended by adding 
at the end the following new item: 
‘‘Sec. 5714. Export bonds.’’. 
SEC. 103. WHOLESALERS REQUIRED TO HAVE PERMIT. 
Section 5712 (relating to application for permit) is 
amended by inserting ‘‘, wholesaler,’’ after ‘‘manufac-
turer’’. 
SEC. 104. CONDITIONS OF PERMIT. 
Subsection (a) of section 5713 (relating to issuance 
of permit) is amended to read as follows: 
‘‘(a) ISSUANCE.— 
‘‘(1) IN GENERAL.—A person shall not engage 
in business as a manufacturer, wholesaler, or im-
porter of tobacco products or as an export ware-
house proprietor without a permit to engage in such 
business. Such permit shall be issued in such form 
and in such manner as the Secretary shall by regula-
tion prescribe, to every person properly qualified 
under sections 5711 and 5712. A new permit may 
be required at such other time as the Secretary shall 
by regulation prescribe. 
‘‘(2) CONDITIONS.—The issuance of a permit 
under this section shall be conditioned upon the 
compliance with the requirements of— 
‘‘(A) this chapter,
‘‘(B) the Contraband Cigarette Trafficking 
Act (18 U.S.C. chapter 114), 
‘‘(C) the Act of October 19, 1949 (15 
U.S.C. chapter 10A), 
‘‘(D) any regulations issued pursuant to 
such statutes, and 
‘‘(E) any other federal laws or regulations 
relating to the taxation, sale, or transportation 
of tobacco products.’’. 
SEC. 105. RECORDS TO BE MAINTAINED. 
Section 5741 (relating to records to be maintained) 
is amended— 
(1) by inserting ‘‘(a) IN GENERAL.—’’ before 
‘‘Every manufacturer’’, 
(2) by inserting ‘‘every wholesaler,’’ after 
‘‘every importer,’’, 
(3) by striking ‘‘such records’’ and inserting 
‘‘records concerning the chain of custody of the to-
bacco products (including the foreign country of 
final destination for packages marked for export) 
and such other records’’, and 
(4) by adding at the end the following new sub-
section: 
‘‘(b) RETAILERS.—Retailers shall maintain records 
of receipt of tobacco products, and such records shall be
available to the Secretary for inspection and audit. An or-
dinary commercial record or invoice shall satisfy the re-
quirements of this subsection if such record shows the date 
of receipt, from whom tobacco products were received, and 
the quantity of tobacco products received. The preceding 
provisions of this subsection shall not be construed to limit 
or preclude other recordkeeping requirements imposed on 
any retailer.’’. 
SEC. 106. REPORTS. 
Section 5722 (relating to reports) is amended— 
(1) by inserting ‘‘(a) IN GENERAL.—’’ before 
‘‘Every manufacturer’’, and 
(2) by adding at the end the following new sub-
section: 
‘‘(b) REPORTS
BY EXPORT WAREHOUSE PROPRI-
ETORS.— 
‘‘(1) IN GENERAL.—Prior to exportation of to-
bacco products from the United States, the export 
warehouse proprietor shall submit a report (in such 
manner and form as the Secretary may by regula-
tion prescribe) to enable the Secretary to identify 
the shipment and assure that it reaches its intended 
destination. 
‘‘(2) AGREEMENTS
WITH
FOREIGN
GOVERN-
MENTS.—Notwithstanding section 6103 of this title,
the Secretary is authorized to enter into agreements 
with foreign governments to exchange or share infor-
mation contained in reports received from export 
warehouse proprietors of tobacco products if— 
‘‘(A) the Secretary believes that such 
agreement will assist in— 
‘‘(i) ensuring compliance with the pro-
visions of this chapter or regulations pro-
mulgated thereunder, or 
‘‘(ii) preventing or detecting violations 
of the provisions of this chapter or regula-
tions promulgated thereunder, and 
‘‘(B) the Secretary obtains assurances 
from such government that the information will 
be held in confidence and used only for the pur-
poses specified in clauses (i) and (ii) of sub-
paragraph (A). 
No information may be exchanged or shared with 
any government that has violated such assurances.’’. 
SEC. 107. FRAUDULENT OFFENSES. 
(a) IN GENERAL.—Subsection (a) of section 5762 
(relating to fraudulent offenses) is amended by striking 
paragraph (1) and redesignating paragraphs (2) through 
(6) as paragraphs (1) through (5), respectively.
(b) OFFENSES RELATING TO DISTRIBUTION OF TO-
BACCO PRODUCTS.—Section 5762 is amended— 
(1) by redesignating subsection (b) as sub-
section (c), 
(2) in subsection (c) (as so redesignated), by in-
serting ‘‘or (b)’’ after ‘‘(a)’’, and 
(3) by inserting after subsection (a) the fol-
lowing new subsection: 
‘‘(b) OFFENSES RELATING TO DISTRIBUTION OF TO-
BACCO PRODUCTS.—It shall be unlawful— 
‘‘(1) for any person to engage in the business 
as a manufacturer or importer of tobacco products 
or cigarette papers and tubes, or to engage in the 
business as a wholesaler or an export warehouse pro-
prietor, without filing the bond and obtaining the 
permit where required by this chapter or regulations 
thereunder; 
‘‘(2) for a manufacturer, importer, or whole-
saler permitted under this chapter intentionally to 
ship, transport, deliver, or receive any tobacco prod-
ucts from or to any person other than a person per-
mitted under this chapter or a retailer, except a per-
mitted importer may receive foreign tobacco prod-
ucts from a foreign manufacturer or a foreign dis-
tributor that have not previously entered the United 
States; 
‘‘(3) for any person (other than the original 
manufacturer of such tobacco products or an export 
warehouse proprietor authorized to receive any to-
bacco products that have previously been exported 
and returned to the United States) to receive any to-
bacco products that have previously been exported 
and returned to the United States; 
‘‘(4) for any export warehouse proprietor inten-
tionally to ship, transport, sell, or deliver for sale 
any tobacco products to any person other than the 
original manufacturer of such tobacco products, an-
other export warehouse proprietor, or a foreign pur-
chaser; 
‘‘(5) for any person (other than a manufacturer 
or an export warehouse proprietor permitted under 
this chapter) intentionally to ship, transport, receive, 
or possess, for purposes of resale, any tobacco prod-
uct in packages marked pursuant to regulations 
issued under section 5723, other than for direct re-
turn to a manufacturer for repacking or for re-ex-
portation or to an export warehouse proprietor for 
re-exportation;
‘‘(6) for any manufacturer, importer, export 
warehouse proprietor, or wholesaler permitted under 
this chapter to make intentionally any false entry in, 
to fail willfully to make appropriate entry in, or to 
fail willfully to maintain properly any record or re-
port that such person is required to keep as required 
by this chapter or the regulations promulgated 
thereunder; 
‘‘(7) for any person to alter, mutilate, destroy, 
obliterate, or remove any mark or label required 
under this chapter upon a tobacco product held for 
sale, except pursuant to regulations of the Secretary 
authorizing relabeling for purposes of compliance 
with the requirements of this section or of State law; 
and 
‘‘(8) for any person to sell at retail more than 
5,000 cigarettes in a single transaction or in a series 
of related transactions, or, in the case of other to-
bacco products, an equivalent quantity as deter-
mined by regulation. 
Any person violating any of the provisions of this sub-
section shall, upon conviction, be fined as provided in sec-
tion 3571 of title 18, United States Code, imprisoned for 
not more than 5 years, or both.’’.
(c) INTENTIONALLY
DEFINED.—Section 5762 is 
amended by adding at the end the following: 
‘‘(d) DEFINITION
OF INTENTIONALLY.—For pur-
poses of this section and section 5761, the term ‘inten-
tionally’ means doing an act, or omitting to do an act, 
deliberately, and not due to accident, inadvertence, or mis-
take, regardless of whether the person knew that the act 
or omission constituted an offense.’’. 
SEC. 108. CIVIL PENALTIES. 
Subsection (a) of section 5761 (relating to civil pen-
alties) is amended— 
(1) by striking ‘‘willfully’’ and inserting ‘‘inten-
tionally’’, and 
(2) 
by 
striking 
‘‘$1,000’’ 
and 
inserting 
‘‘$10,000’’. 
SEC. 109. DEFINITIONS. 
(a) EXPORT WAREHOUSE PROPRIETOR.—Subsection 
(i) of section 5702 (relating to definition of export ware-
house proprietor) is amended by inserting before the pe-
riod the following: ‘‘or any person engaged in the business 
of exporting tobacco products from the United States for 
purposes of sale or distribution. Any duty free store that 
sells, offers for sale, or otherwise distributes to any person 
in any single transaction more than 30 packages of ciga-
rettes, or its equivalent for other tobacco products as the
Secretary shall by regulation prescribe, shall be deemed 
an export warehouse proprietor under this chapter’’. 
(b) RETAILER; WHOLESALER.—Section 5702 is 
amended by adding at the end the following: 
‘‘(p) RETAILER.—The term ‘retailer’ means any deal-
er who sells, or offers for sale, any tobacco product at re-
tail. The term ‘retailer’ includes any duty-free store that 
sells, offers for sale, or otherwise distributes at retail in 
any single transaction 30 or fewer packages of cigarettes 
or its equivalent for other tobacco products. 
‘‘(q) WHOLESALER.—The term ‘wholesaler’ means 
any person engaged in the business of purchasing tobacco 
products for resale at wholesale, or any person acting as 
an agent or broker for any person engaged in the business 
of purchasing tobacco products for resale at wholesale.’’. 
SEC. 110. EFFECTIVE DATE. 
The amendments made by this title shall take effect 
on January 1, 2006. 
TITLE II—AMENDMENTS TO THE 
CONTRABAND 
CIGARETTE 
TRAFFICKING ACT 
SEC. 201. AMENDMENTS TO THE CONTRABAND CIGARETTE 
TRAFFICKING ACT. 
(a) EXPANSION OF ACT TO COVER OTHER TOBACCO 
PRODUCTS.—
(1) Paragraphs (1) and (2) of section 2341 of 
title 18, United States Code, are amended to read 
as follows: 
‘‘(1) the term ‘tobacco product’ has the mean-
ing given to such term by section 5702 of the Inter-
nal Revenue Code of 1986; 
‘‘(2) the term ‘contraband tobacco product’ 
means any tobacco product if— 
‘‘(A)(i) in the case of cigarettes, such ciga-
rettes are in a quantity in excess of 2,000 ciga-
rettes; or 
‘‘(ii) in the case of a tobacco product other 
than a cigarette, such product is in a quantity 
in excess of the equivalent of 2,000 cigarettes 
as determined under rules made by the Attor-
ney General; 
‘‘(B)(i) if the State in which such tobacco 
product is found requires a stamp, impression, 
or other indication to be placed on packages or 
other containers of product to evidence payment 
of tobacco taxes, such tobacco product bears no 
evidence of such payment; or 
‘‘(ii) if such State has no such require-
ment, applicable tobacco taxes are found to be 
not paid; and
‘‘(C) such tobacco product is in the posses-
sion of any person other than— 
‘‘(i) a person holding a permit issued 
pursuant to chapter 52 of the Internal 
Revenue Code of 1986 as a manufacturer 
or importer of tobacco products or as an 
export warehouse proprietor, or a person 
operating a customs bonded warehouse 
pursuant to section 311 or 555 of the Tar-
iff Act of 1930 (19 U.S.C. 1311 or 1555) 
or an agent of such person; 
‘‘(ii) a common or contract carrier 
transporting the tobacco product involved 
under a proper bill of lading or freight bill 
which states the quantity, source, and des-
tination of such product; 
‘‘(iii) a person— 
‘‘(I) who is licensed or otherwise 
authorized by the State where the to-
bacco product is found to account for 
and pay tobacco taxes imposed by 
such State; and 
‘‘(II) who has complied with the 
accounting and payment requirements 
relating to such license or authoriza-