I 
111TH CONGRESS 
2D SESSION 
H. R. 5178 
To amend the Internal Revenue Code to reduce tobacco smuggling, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 29, 2010 
Mr. DOGGETT (for himself, Mr. LEVIN, Mr. WAXMAN, Mr. WEINER, Mr. 
GEORGE MILLER of California, Mr. VAN HOLLEN, Mr. PASCRELL, Mr. 
LEWIS of Georgia, Mr. MCDERMOTT, Mr. DAVIS of Illinois, Mr. KIND, 
Mr. BLUMENAUER, Ms. LINDA T. SA´NCHEZ of California, Mr. STARK, 
Ms. SCHWARTZ, Mr. THOMPSON of California, Ms. GINNY BROWN-WAITE 
of Florida, Ms. DELAURO, Ms. ESHOO, Mr. ISRAEL, Ms. JACKSON LEE 
of Texas, Ms. KILPATRICK of Michigan, Mr. LIPINSKI, Mrs. MCCARTHY 
of New York, Mr. SNYDER, Ms. SUTTON, Mr. WALZ, Mr. WELCH, Ms. 
WOOLSEY, Mr. NADLER of New York, Mr. BERMAN, Mr. LANGEVIN, Ms. 
DEGETTE, Mrs. MALONEY, Mr. GENE GREEN of Texas, Mr. HINCHEY, 
Ms. LEE of California, Mr. DEFAZIO, Mr. DELAHUNT, Mr. RUSH, Mr. 
MARKEY of Massachusetts, Mr. CUMMINGS, Mr. FILNER, Ms. ZOE 
LOFGREN of California, Ms. MATSUI, Mr. MEEKS of New York, Mr. 
PLATTS, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. PIERLUISI, Mr. 
PALLONE, Mrs. CAPPS, Mr. HOLT, Mr. SMITH of New Jersey, Mr. WU, 
Mr. SHERMAN, Mr. BRALEY of Iowa, Mr. ELLISON, Mr. HARE, Mr. 
HINOJOSA, Mr. HONDA, Ms. CLARKE, Mr. KUCINICH, Mr. MATHESON, 
Ms. SLAUGHTER, Mr. TIERNEY, Mr. GRAYSON, Mr. SERRANO, Ms. WA-
TERS, Mr. BISHOP of New York, Ms. KAPTUR, Ms. WATSON, Mrs. DAVIS 
of California, Mr. GRIJALVA, Mr. FARR, Ms. LORETTA SANCHEZ of Cali-
fornia, Mr. CARNAHAN, Mr. COHEN, Mrs. NAPOLITANO, Mr. CONNOLLY 
of Virginia, Mr. GUTIERREZ, Mr. SIRES, Ms. BALDWIN, Mr. OLVER, Mr. 
PAYNE, Ms. RICHARDSON, Ms. ROYBAL-ALLARD, Mrs. LOWEY, Mr. 
MCGOVERN, 
Ms. 
EDWARDS
of 
Maryland, 
Mr. 
LOEBSACK, 
Ms. 
SCHAKOWSKY, Mr. FRANK of Massachusetts, Mr. ROTHMAN of New Jer-
sey, Mr. ANDREWS, Mr. RYAN of Ohio, Ms. TSONGAS, Mr. ACKERMAN, 
Ms. HIRONO, Mr. OBERSTAR, Mr. CAPUANO, Mr. LYNCH, Mr. SARBANES, 
Ms. WASSERMAN SCHULTZ, Ms. NORTON, Mr. ARCURI, Mr. JACKSON of 
Illinois, Ms. KILROY, Mr. SESTAK, Mr. KENNEDY, Mr. HALL of New 
York, Mr. HIMES, Mr. TONKO, Mr. MORAN
of Virginia, Mrs. 
DAHLKEMPER, Ms. HARMAN, Mr. MOORE of Kansas, Mr. BAIRD, Mr. 
SCHRADER, and Mr. GARAMENDI) introduced the following bill; which 
was referred to the Committee on Ways and Means 
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A BILL 
To amend the Internal Revenue Code to reduce tobacco 
smuggling, 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 AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Smuggled Tobacco Prevention Act of 2010’’ or the 
‘‘STOP Act’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
TITLE I—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 
Sec. 101. Amendment of 1986 code. 
Sec. 102. Machines used to manufacture or package cigarettes or other tobacco 
products. 
Sec. 103. Improved marking and labeling. 
Sec. 104. Wholesalers and manufacturers, importers, and sellers of tobacco pro-
duction machines required to have permit. 
Sec. 105. Conditions of permit. 
Sec. 106. Records to be maintained. 
Sec. 107. Reports. 
Sec. 108. Fraudulent offenses. 
Sec. 109. Penalties. 
Sec. 110. Definitions. 
Sec. 111. Conforming amendments. 
Sec. 112. Effective date. 
TITLE II—IMPORT FRAUD 
Sec. 201. Maximum penalty for importation of tobacco products and cigarette 
papers and tubes by fraudulent means. 
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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. MACHINES USED TO MANUFACTURE OR PACKAGE 
CIGARETTES OR OTHER TOBACCO PROD-
UCTS. 
(a) IN GENERAL.—Section 5762 (relating to criminal 
penalties) is amended— 
(1) by redesignating subsection (b) as sub-
section (c), and 
(2) by inserting after subsection (a) the fol-
lowing new subsection: 
‘‘(b) MACHINES USED TO MANUFACTURE, PROCESS, 
OR PACKAGE CIGARETTES OR OTHER TOBACCO PROD-
UCTS.— 
‘‘(1) SALE, LEASE, DELIVERY
OF
MANUFAC-
TURING MACHINES TO LICENSED PERSONS.—Any to-
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bacco production machine may be sold, leased, im-
ported, or delivered only to— 
‘‘(A) persons— 
‘‘(i) lawfully engaged in— 
‘‘(I) the sale, lease, or delivery of 
such machines, 
‘‘(II) the manufacture or proc-
essing of tobacco products, or 
‘‘(III) the application of unique 
identification markings onto tobacco 
product packages pursuant to section 
5723, and 
‘‘(ii) that have all Federal and State 
permits, registrations, and licenses re-
quired to engage in such activities, or 
‘‘(B) in the case of a machine which is 
meant and expected to be used by an individual 
to make tobacco products for his or her own 
personal use, such an individual. 
‘‘(2) SALE, LEASE, DELIVERY OF MACHINES TO 
PERSONS ENGAGED IN ILLEGAL MANUFACTURE OF 
CONTRABAND.—No tobacco production machine 
shall knowingly be manufactured for or be (directly 
or indirectly) sold, leased, delivered, imported, or 
otherwise made available to any person engaged in 
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the illegal manufacture, distribution, or sale of coun-
terfeit or contraband tobacco products, unique iden-
tification markings, or other tax-payment indicia. 
‘‘(3) RENDERING UNUSED MACHINES INOPER-
ABLE.—Any tobacco production machine that is no 
longer being used as such shall be made irreparably 
inoperable for such use before being disposed of or 
put to any other use. This paragraph shall not apply 
to any such machines being kept solely for display 
or for historical purposes. 
‘‘(4) RECORDS.— 
‘‘(A) IN
GENERAL.—Any person leasing, 
importing, exporting, or delivering a tobacco 
production machine shall maintain and keep 
records relating to any transfers or deliveries of 
the machine, including the name, address, other 
contact information, and any permit, registra-
tion, or license number of the person receiving 
delivery of the machine, or to whom the ma-
chine is leased or otherwise transferred, as the 
case may be. 
‘‘(B) 
5-YEAR
HOLDING
PERIOD
FOR 
RECORDS.—Any record required to be main-
tained and kept under subparagraph (A) shall 
be kept for the 5-year period beginning on the 
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first date such record is required to be so main-
tained and kept. 
‘‘(C) AVAILABILITY
OF
RECORDS.—Such 
records shall be made available to the Secretary 
and other Federal and State government law 
enforcement officials for inspection and audit 
upon request. 
‘‘(D) SAFE
HARBOR.—An ordinary com-
mercial record or invoice shall satisfy the re-
quirements of this paragraph if such record de-
scribes the transaction and the related machine 
and provides the date of the transaction and 
the name, contact information, and any permit, 
registration, or license number of all parties to 
the transaction or acting as agents for those 
parties in regard to the transaction. 
‘‘(5) TOBACCO
PRODUCTION
MACHINE.—For 
purposes of this subsection, the term ‘tobacco pro-
duction machine’ means any machine (or component 
integral to the operation of such a machine) used to 
manufacture, process, or package tobacco products 
or to apply unique identification markings to pack-
ages of tobacco products. 
‘‘(6) VIOLATIONS.— 
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‘‘(A) IN
GENERAL.—Whoever knowingly 
violates paragraph (1), (2), or (3) shall, for 
each offense, be fined not more than $10,000 or 
an amount equal to 3 times the fair market 
value of the tobacco product machine involved 
(whichever is greater), or imprisoned not more 
than five years, or both. 
‘‘(B) RECORDKEEPING.—Whoever know-
ingly violates paragraph (4) shall, for each of-
fense, be fined not more than $10,000.’’. 
(b) CONFORMING AMENDMENT.—Subsection (c) of 
section 5762 (as so redesignated) is amended by striking 
‘‘subsection (a)’’ and inserting ‘‘subsections (a) and (b)’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to sales, leases, and transfers more 
than 6 months after the date of the enactment of this Act. 
SEC. 103. IMPROVED MARKING AND LABELING. 
(a) IN GENERAL.—Section 5723 (relating to pack-
ages, marks, labels, and notices) is amended— 
(1) by striking ‘‘, if any,’’ in subsection (b), 
(2) by adding at the end of subsection (b) the 
following: ‘‘Such marks, labels, and notices shall in-
clude marks and notices relating to the following: 
‘‘(1) GENERAL REQUIREMENTS FOR DOMESTIC 
MARKET.—Each person who is a manufacturer or 
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importer of tobacco products shall (in accordance 
with final regulations promulgated by the Secretary) 
ensure that, before the product leaves the person’s 
custody, a unique identification marking is affixed to 
or forms part of each package of tobacco product 
manufactured or imported by such person for sale or 
distribution. To facilitate efficient tracking and trac-
ing of tobacco products through the distribution sys-
tem, all manufacturers or importers of tobacco prod-
ucts shall, in addition to such unique identification 
marking, also, in accordance with regulations pre-
scribed by the Secretary, ensure that unique identi-
fication markings are affixed to or form part of ag-
gregate packing modes (such as cartons, cases, and 
master cases for cigarettes). The Secretary shall de-
termine the size, location, and methods for such 
markings. The Secretary shall establish regulations 
requiring that all persons within the distribution 
chain, up to but not including the ultimate retailer, 
utilize the unique identification markings on aggre-
gate packing modes to facilitate the tracking and 
tracing of tobacco product through the distribution 
system. 
‘‘(2) 
MARKING
REQUIREMENTS
FOR
EX-
PORTS.—A unique identification marking shall be af-
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fixed to or form part of each package of tobacco 
product that is exported, or sold for export, that dis-
tinguishes it from those products intended for dis-
tribution or sale within the United States. The Sec-
retary shall by regulation prescribe the size, location, 
and other characteristics of such marking, and it 
may contain a serial number that is assigned to the 
country of export. 
‘‘(3) AUTHORIZATION
OF
FEDERAL
UNIQUE 
IDENTIFICATION MARKING.—Not later than 1 year 
after the date of the enactment of the Smuggled To-
bacco Prevention Act of 2010, the Secretary shall by 
regulation require the use of a unique identification 
marking on all products subject to tax under this 
chapter.’’, and 
(3) by adding at the end the following new sub-
section: 
‘‘(f) UNIQUE IDENTIFICATION MARKING.— 
‘‘(1) IN GENERAL.—No tobacco product may be 
sold, offered for sale, distributed, or otherwise deliv-
ered for final sale to any consumer in the United 
States unless the unique identification marking that 
meets the requirements of this section (and any reg-
ulations prescribed thereunder) is affixed to or forms 
part of the package in which it is contained. No per-
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other export warehouse proprietor, or a foreign pur-
chaser, 
‘‘(6) for any person (other than a manufacturer 
or an export warehouse proprietor permitted under 
this chapter) to knowingly 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, 
‘‘(7) for any manufacturer, importer, export 
warehouse proprietor, or wholesaler permitted under 
this chapter to make any false entry in, to fail to 
make an entry in, or to knowingly fail to maintain 
properly any record or report required by this chap-
ter or the regulations promulgated thereunder with 
the intent to defraud the United States, 
‘‘(8) for any person, with the intent to defraud 
the United States, to alter, mutilate, destroy, oblit-
erate, or remove any mark or label required under 
this chapter upon a tobacco product held for sale, or 
to create, possess, or apply on any tobacco product 
or its packaging any counterfeit versions of any such 
marks or labels, and 
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