Our colleagues recently wrote about 14 memoranda from the new U.S. Attorney General (AG) Pam Bondi to Department of Justice (DOJ) employees framing the DOJ’s current policies and enforcement priorities. In a memorandum addressing DOJ’s general charging, plea bargaining, and sentencing policy, the AG stated the following: “To free resources to address more pressing priorities, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) shall shift resources from its Alcohol and Tobacco Enforcement Programs to focus on matters relating to the other priorities set forth herein. No resources shall be diverted from the ATF’s regulatory responsibilities, such as federal firearms licenses and background checks.”
ATF is an agency organized within DOJ and, therefore, subject to the authority of the AG. In general, ATF’s Alcohol and Tobacco Enforcement Programs aim to “target, identify, and dismantle criminal enterprises with ties to violent crime, that traffic illicit liquor or contraband tobacco in interstate commerce; seize and deny their access to assets and funds; and prevent their encroachment into the legitimate alcohol or tobacco industry.”
Specifically, ATF enforces two key tobacco-related laws, including the Prevent All Cigarette Trafficking (PACT) Act and the Contraband Cigarette Trafficking Act (CCTA). The PACT Act aims to combat illegal sales by requiring anyone selling cigarettes, smokeless tobacco, and electronic nicotine delivery systems (ENDS) online or through interstate commerce to register with ATF and state governments and comply with state and local tobacco laws. The PACT Act also prohibits the mailing of these products through the U.S. Postal Service and includes provisions for reporting, recordkeeping, and enforcement actions by ATF.
The CCTA aims to prevent criminal organizations from trafficking cigarettes and selling them on the black market to generate profits to fund criminal and terrorist activities. Under the CCTA, it is a federal crime to ship, transport, receive, possess, sell, distribute, or purchase more than 10,000 cigarettes without tax stamps in the states which require tax stamps or 500 units of smokeless tobacco without proper documentation of state tax payments or in violation of state regulatory laws.
Why It Matters
ATF is one of several federal regulators that enforce tobacco-related laws, but ATF plays a critical role in this regulatory ecosystem through its power to enforce broad laws related to interstate shipments of certain tobacco products. The extent to which enforcement will be affected by the AG’s new mandate is not yet clear, but if ATF is not able to devote resources to enforce these laws, it could embolden those companies who operate in a noncompliant manner, while penalizing those that devote significant time, energy, and money to complying with federal law.