II 116th CONGRESS 1st Session S. 1965 IN THE SENATE OF THE UNITED STATES June 25, 2019 Mr. Wicker (for himself and Ms. Sinema ) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations A BILL To authorize actions with respect to foreign countries engaged in illicit trade in tobacco products or their precursors, and for other purposes.

1. Short title This Act may be cited as the Combating the Illicit Trade in Tobacco Products Act . 2. Definitions In this Act: (1) Appropriate congressional committees The term appropriate congressional committees means— (A) the Committee on Financial Services, the Committee on Foreign Affairs, and the Committee on the Judiciary of the House of Representatives; and (B) the Committee on Banking, Housing, and Urban Affairs, the Committee on Foreign Relations, and the Committee on the Judiciary of the Senate. (2) Foreign person The term foreign person means a person that is not a United States person. (3) Illicit trade in tobacco products or their precursors The term illicit trade in tobacco products or their precursors means any practice or conduct prohibited by law that relates to production, shipment, receipt, possession, distribution, sale, or purchase of tobacco products or their precursors, including any practice or conduct intended to facilitate such activity. (4) Person The term person means an individual or entity. (5) United States person The term United States person means— (A) a United States citizen or an alien lawfully admitted for permanent residence to the United States; or (B) an entity organized under the laws of the United States or of any jurisdiction within the United States, including a foreign branch of such an entity. 3. Findings Congress makes the following findings: (1) The illicit trade in tobacco products or their precursors is a multibillion dollar business that fuels organized crime, fosters public corruption, undermines public health goals, and finances terrorist groups that threaten global security and stability. (2) According to an estimate by the World Health Organization, one in every 10 cigarettes smoked is illegal. (3) The Center for Public Integrity states, while one 40-foot container of cigarettes (containing 10 million sticks) can be produced in China for just $100,000, the street value of such a container smuggled into the United States is up to $2 million. . (4) According to the International Criminal Police Organization (commonly known as Interpol ), the trade in illicit cigarettes accounts for 11.6 percent of global consumption, equaling 657,000,000,000 cigarettes a year. (5) According to the Department of State report entitled The Global Illicit Trade in Tobacco: A Threat to National Security , cigarette smuggling enables corruption and undermines good governance. (6) According to that Department of State report, illicit trade in tobacco products or their precursors costs governments and taxpayers between $40,000,000,000 and $50,000,000,000 annually in tax revenues. (7) According to that Department of State report, the illicit trade in tobacco products or their precursors facilitates other crimes and provides funding for additional criminal activities, including money laundering, bulk cash smuggling, and the trafficking in humans, weapons, drugs, antiquities, diamonds, and counterfeit goods. (8) The report entitled Illicit Trade: Converging Criminal Networks by the Organisation for Economic Co-operation and Development stated that cigarettes present a high-profit margin and are among the most commonly traded products on the black market due to the relative ease of production and movement, along with low detection rates and penalties. (9) According to the Department of State report entitled, The Global Illicit Trade in Tobacco: A Threat to National Security , illicit trade in tobacco products or their precursors can be trans­na­tion­al, with proceeds earned domestically and sent overseas to finance attacks against United States interests, or earned domestically by foreign actors who can operate more easily from within the country. (10) The Center for the Analysis of Terrorism reports that nearly 15 terrorist organizations throughout the world regularly have recourse in large proportions to smuggling and counterfeiting cigarettes to be financed, in particular the Pakistani Taliban, Lashkar-E–Taiba, Al-Qaida au Maghreb Islamique, Hezbollah, Hamas, the Revolutionary Armed Forces of Colombia, the Kurdistan Workers’ Party, Euskadi Ta Askatasuna, and the Irish Republican Army. 4. Designation of and actions with respect to foreign countries engaged in illicit trade in tobacco products or their precursors (a) Designation Not later than one year after the date of the enactment of this Act, and annually thereafter, the Secretary of State, in consultation with the Secretary of Defense, the Attorney General, and the Secretary of the Treasury, shall— (1) review the status of illicit trade in tobacco products or their precursors in each foreign country to determine whether— (A) the country is a major source, point of transit, or consumer of illicit tobacco products or their precursors; or (B) (i) the country meets the criteria of subparagraph (A); and (ii) the government of the country has actively engaged in or knowingly profited from the illicit trade in tobacco products or their precursors; (2) designate each foreign country that— (A) meets the criteria of subparagraph (A) of paragraph (1) as a focus country for illicit trade in tobacco products or their precursors for purposes of providing assistance to the country under subsection (b); and (B) meets the criteria of subparagraph (B) of paragraph (1) as a country of concern for illicit trade in tobacco products or their precursors for purposes of withholding United States development assistance and security assistance to the country under subsection (c); and (3) submit to the appropriate congressional committees a report that includes— (A) a list that identifies each foreign country designated as a focus country for illicit trade in tobacco products or their precursors under paragraph (2)(A); and (B) a list that identifies each foreign country designated as a country of concern for illicit trade in tobacco products or their precursors under paragraph (2)(B). (b) Assistance to focus countries (1) Law enforcement professional training The Secretary of State, in coordination with the heads of other relevant United States departments and agencies and nongovernmental organizations where appropriate, is authorized to provide assistance to foreign countries designated as focus countries for illicit trade in tobacco products or their precursors under subsection (a)(2)(A) to improve the effectiveness of law enforcement to combat the illicit trade in tobacco products or their precursors. (2) Investigative capacity building The Secretary of State, in coordination with the heads of other relevant United States departments and agencies, is authorized to establish and carry out programs to increase the capacity of law enforcement and customs and border security offices in foreign countries designated as focus countries for illicit trade in tobacco products or their precursors under subsection (a)(2)(A). (c) Prohibition on assistance to countries of concern (1) In general The Secretary of State may not provide development assistance or security assistance to foreign countries designated as countries of concern for illicit trade in tobacco products or their precursors under subsection (a)(2)(B). (2) Waiver The Secretary of State may waive the application of paragraph (1) with respect to a foreign country described in paragraph (1) if the Secretary determines and certifies to the appropriate congressional committees that such waiver is in the national security interests of the United States. (3) Definitions In this subsection: (A) Development assistance The term development assistance means assistance authorized under— (i) chapter 1 or 10 of part I of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2151 et seq. or 2293 et seq.); or (ii) chapter 4 of part II of such Act ( 22 U.S.C. 2346 et seq.). (B) Security assistance The term security assistance means assistance authorized under part II of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2301 et seq.). 5. Imposition of sanctions with respect to foreign persons responsible for illicit trade in tobacco products or their precursors (a) In general The President is authorized to impose the sanctions described in subsection (b) with respect to any foreign person the President determines, based on credible evidence— (1) is responsible for illicit trade in tobacco products or their precursors; (2) acted as an agent of or on behalf of a foreign person in a matter relating to an activity described in paragraph (1); (3) is a government official, or a senior associate of such an official, that is responsible for, or complicit in, ordering, controlling, or otherwise directing, the illicit trade in tobacco products or their precursors, including acts of significant corruption, bribery, or the facilitation or transfer of the proceeds of corruption to foreign jurisdictions; or (4) has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, an activity described in paragraph (1), (2), or (3). (b) Sanctions described The sanctions described in this subsection are the following: (1) Inadmissibility to United States In the case of a foreign person who is an individual— (A) ineligibility to receive a visa to enter the United States or to be admitted to the United States; or (B) if the individual has been issued a visa or other documentation, revocation, in accordance with section 221(i) of the Immigration and Nationality Act ( 8 U.S.C. 1201(i) ), of the visa or other documentation. (2) Blocking of property (A) In general The blocking, in accordance with the International Emergency Economic Powers Act ( 50 U.S.C. 1701 et seq.), of all transactions in all property and interests in property of a foreign person if such property and interests in property are in the United States, come within the United States, or are or come within the possession or control of a United States person. (B) Inapplicability of national emergency requirement The requirements of section 202 of the International Emergency Economic Powers Act ( 50 U.S.C. 1701 ) shall not apply for purposes of this section. (C) Exception relating to importation of goods (i) In general The authority to block and prohibit all transactions in all property and interests in property under subparagraph (A) shall not include the authority to impose sanctions on the importation of goods. (ii) Good defined In this subparagraph, the term good means any article, natural or man-made substance, supply or manufactured product, including inspection and test equipment, and excluding technical data. (c) Consideration of certain information in imposing sanctions In determining whether to impose sanctions under subsection (a), the President shall consider— (1) information provided by the chairperson and ranking member of each of the appropriate congressional committees; and (2) credible information obtained by other countries and nongovernmental organizations that monitor violations of human rights. (d) Requests by chairperson and ranking member of appropriate congressional committees Not later than 120 days after receiving a written request from the chairperson and ranking member of one of the appropriate congressional committees with respect to whether a foreign person has engaged in an activity described in subsection (a), the President shall— (1) determine if that person has engaged in such an activity; and (2) submit to the chairperson and ranking member of that committee with respect to that determination a report that includes— (A) a statement of whether or not the President imposed or intends to impose sanctions with respect to the person; and (B) if the President imposed or intends to impose sanctions, a description of those sanctions. (e) Exception To comply with United Nations Headquarters Agreement and law enforcement objectives Sanctions under subsection (b)(1) shall not apply to an individual if admitting the individual into the United States would further important law enforcement objectives or is necessary to permit the United States to comply with the Agreement regarding the Headquarters of the United Nations, signed at Lake Success June 26, 1947, and entered into force November 21, 1947, between the United Nations and the United States, or other applicable international obligations of the United States. (f) Enforcement of blocking of property A person that violates, attempts to violate, conspires to violate, or causes a violation of subsection (b)(2) or any regulation, license, or order issued to carry out subsection (b)(2) shall be subject to the penalties set forth in subsections (b) and (c) of section 206 of the International Emergency Economic Powers Act ( 50 U.S.C. 1705 ) to the same extent as a person that commits an unlawful act described in subsection (a) of that section. (g) Termination of sanctions The President may terminate the application of sanctions under this section with respect to a foreign person if the President determines and reports to the appropriate congressional committees not later than 15 days before the termination of the sanctions that— (1) credible information exists that the person did not engage in the activity for which sanctions were imposed; (2) the person has been prosecuted appropriately for the activity for which sanctions were imposed; (3) the person has credibly demonstrated a significant change in behavior, has paid an appropriate consequence for the activity for which sanctions were imposed, and has credibly committed to not engage in an activity described in subsection (a) in the future; or (4) the termination of the sanctions is in the vital national security interests of the United States. (h) Regulatory authority The President shall issue such regulations, licenses, and orders as are necessary to carry out this section. (i) Identification of sanctionable foreign persons The Assistant Secretary of State for International Narcotics and Law Enforcement Affairs, in consultation with the Assistant Secretary of State for Consular Affairs and other bureaus of the Department of State, as appropriate, is authorized to submit to the Secretary of State, for review and consideration, the names of foreign persons who may meet the criteria described in subsection (a). 6. Reports to Congress (a) In general Not later than 120 days after the date of the enactment of this Act and annually thereafter, the President shall submit to the appropriate congressional committees a report that includes— (1) a list of each foreign person with respect to which the President imposed sanctions pursuant to section 5 during the year preceding the submission of the report; (2) a description of the type of sanctions imposed with respect to each such foreign person; (3) the number of foreign persons with respect to which the President— (A) imposed sanctions under section 5 during that year; and (B) terminated sanctions under section 5 during that year; (4) the dates on which such sanctions were imposed or terminated, as the case may be; (5) the reasons for imposing or terminating such sanctions; and (6) a description of the efforts of the President to encourage the governments of other countries to impose sanctions that are similar to the sanctions authorized by section 5. (b) Form of report (1) In general Each report required by subsection (a) shall be submitted in unclassified form, but may include a classified annex. (2) Exception The name of a foreign person to be included in the list required by subsection (a)(1) may be submitted in the classified annex authorized by paragraph (1) only if the President— (A) determines that it is vital for the national security interests of the United States to do so; (B) uses the annex in a manner consistent with congressional intent and the purposes of this Act; and (C) not later than 15 days before submitting the name in a classified annex, provides to the appropriate congressional committees notice of, and a justification for, including the name in the classified annex despite any publicly available credible information indicating that the person engaged in an activity described in section 5(a). (c) Public availability (1) In general The unclassified portion of the report required by subsection (a) shall be made available to the public, including through publication in the Federal Register. (2) Nonapplicability of confidentiality requirement with respect to visa records The President shall publish the list required by subsection (a)(1) without regard to the requirements of section 222(f) of the Immigration and Nationality Act ( 8 U.S.C. 1202(f) ) with respect to confidentiality of records pertaining to the issuance or refusal of visas or permits to enter the United States.