Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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AG MYERS & LORILLARD REACH AGREEMENT TO REDUCE ILLEGAL INTERNET CIGARETTE SALES

July 10, 2006

Attorney General Hardy Myers today announced that Lorillard Tobacco Co. has agreed to implement new measures to prevent the illegal sale of its cigarettes over the Internet and through the mail.  These protocols are being adopted nationwide and voluntarily by Lorillard as part of an agreement reached with Oregon and 32 Attorneys General across the country.  A similar agreement was reached with Philip Morris USA in January.

"As with Philip Morris, this agreement will simply reduce the number of children that will have direct access to cigarettes," Myers said. "Traditional retailers require photo IDs to prevent our kids from buying cigarettes but a great majority of internet sellers have totally inadequate age-verification systems. Lorillard now will refuse to supply tobacco products to those found by the Attorneys General to be selling illegally over the Internet."

The protocols include:

  • termination of shipments of cigarettes to any of Lorillard's direct customers that the Attorneys General have found to be engaging in illegal Internet and mail order sales;
  • reduction in the amount of product made available to direct customers found by the Attorneys General to be engaged in the illegal re-sale of Lorillard's cigarettes to the Internet vendors;
  • suspension from the company's incentive programs, any retailer found by the Attorneys General to be engaging in such illegal sales.

Myers explained that virtually all sales of cigarettes over the Internet are illegal because the sellers are violating one or more state and federal laws, including state age verification laws; the federal Jenkins Act (which requires that such sales be reported to state authorities); state laws prohibiting or regulating the direct shipment of cigarettes to consumers; state and federal tax laws; federal mail and wire fraud statutes; the federal Contraband Cigarette Trafficking Act; and the federal RICO law. Many of the sales made by foreign websites also violate federal smuggling, cigarette labeling and money laundering laws.

Myers believes that Internet cigarette sales present a significant risk to public health, especially for youth. "Not only do most Internet vendors have inadequate age verification systems but they illegally fail to charge taxes, and research has shown that lower cigarette prices lead to increased smoking rates, particularly among youth," Myers explained. Moreover, numerous studies have shown that the earlier an individual begins to smoke, the more likely it is that the person will become addicted. These factors make age verification through photo IDs a critical safeguard in protecting children from a lifetime of smoking.

Today's agreement is another major development in multi-pronged efforts by state Attorneys General to restrict the payment, shipment and supply operations of the illegal Internet cigarette traffickers.  In March 2005, Attorneys General announced that the major credit card companies had all agreed to stop processing credit card payments for the Internet retailers.  Later in the year, DHL, UPS and FedEx agreed to stop shipping packages for the vendors engaged in these illegal sales.

In addition to Oregon's Attorney General Myers, the agreement was joined by Attorneys General from Alabama, Arkansas, California, Connecticut, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, Northern Mariana Islands, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia and Wyoming.

Consumers wanting more information about consumer protection in Oregon may contact the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) and toll-free at 1-877-877-9392. More information on Tobacco Enforcement and Oregon's involvement is available at www.doj.state.or.us/tobacco.  

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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