Combating the Illicit Trade in Tobacco Products Act

II 116TH CONGRESS 1ST SESSION S. 1965 To authorize actions with respect to foreign countries engaged in illicit trade in tobacco products or their precursors, and for other purposes. 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 en- gaged in illicit trade in tobacco products or their precur- sors, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Combating the Illicit 4 Trade in Tobacco Products Act’’. 5 SEC. 2. DEFINITIONS. 6 In this Act: 7 (1) APPROPRIATE CONGRESSIONAL COMMIT- 8 TEES.—The term ‘‘appropriate congressional com- 9 mittees’’ means— 10 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 2 •S 1965 IS (A) the Committee on Financial Services, 1 the Committee on Foreign Affairs, and the 2 Committee on the Judiciary of the House of 3 Representatives; and 4 (B) the Committee on Banking, Housing, 5 and Urban Affairs, the Committee on Foreign 6 Relations, and the Committee on the Judiciary 7 of the Senate. 8 (2) FOREIGN PERSON.—The term ‘‘foreign per- 9 son’’ means a person that is not a United States 10 person. 11 (3) ILLICIT TRADE IN TOBACCO PRODUCTS OR 12 THEIR PRECURSORS.—The term ‘‘illicit trade in to- 13 bacco products or their precursors’’ means any prac- 14 tice or conduct prohibited by law that relates to pro- 15 duction, shipment, receipt, possession, distribution, 16 sale, or purchase of tobacco products or their pre- 17 cursors, including any practice or conduct intended 18 to facilitate such activity. 19 (4) PERSON.—The term ‘‘person’’ means an in- 20 dividual or entity. 21 (5) UNITED STATES PERSON.—The term 22 ‘‘United States person’’ means— 23 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 3 •S 1965 IS (A) a United States citizen or an alien law- 1 fully admitted for permanent residence to the 2 United States; or 3 (B) an entity organized under the laws of 4 the United States or of any jurisdiction within 5 the United States, including a foreign branch of 6 such an entity. 7 SEC. 3. FINDINGS. 8 Congress makes the following findings: 9 (1) The illicit trade in tobacco products or their 10 precursors is a multibillion dollar business that fuels 11 organized crime, fosters public corruption, under- 12 mines public health goals, and finances terrorist 13 groups that threaten global security and stability. 14 (2) According to an estimate by the World 15 Health Organization, one in every 10 cigarettes 16 smoked is illegal. 17 (3) The Center for Public Integrity states, 18 ‘‘while one 40-foot container of cigarettes (con- 19 taining 10 million sticks) can be produced in China 20 for just $100,000, the street value of such a con- 21 tainer smuggled into the United States is up to $2 22 million.’’. 23 (4) According to the International Criminal Po- 24 lice Organization (commonly known as ‘‘Interpol’’), 25 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 4 •S 1965 IS the trade in illicit cigarettes accounts for 11.6 per- 1 cent of global consumption, equaling 2 657,000,000,000 cigarettes a year. 3 (5) According to the Department of State re- 4 port entitled ‘‘The Global Illicit Trade in Tobacco: 5 A Threat to National Security’’, cigarette smuggling 6 enables corruption and undermines good governance. 7 (6) According to that Department of State re- 8 port, illicit trade in tobacco products or their precur- 9 sors costs governments and taxpayers between 10 $40,000,000,000 and $50,000,000,000 annually in 11 tax revenues. 12 (7) According to that Department of State re- 13 port, the illicit trade in tobacco products or their 14 precursors facilitates other crimes and provides 15 funding for additional criminal activities, including 16 money laundering, bulk cash smuggling, and the 17 trafficking in humans, weapons, drugs, antiquities, 18 diamonds, and counterfeit goods. 19 (8) The report entitled ‘‘Illicit Trade: Con- 20 verging Criminal Networks’’ by the Organisation for 21 Economic Co-operation and Development stated that 22 cigarettes present a high-profit margin and are 23 among the most commonly traded products on the 24 black market due to the relative ease of production 25 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 5 •S 1965 IS and movement, along with low detection rates and 1 penalties. 2 (9) According to the Department of State re- 3 port entitled, ‘‘The Global Illicit Trade in Tobacco: 4 A Threat to National Security’’, illicit trade in to- 5 bacco products or their precursors can be transna- 6 tional, with proceeds earned domestically and sent 7 overseas to finance attacks against United States in- 8 terests, or earned domestically by foreign actors who 9 can operate more easily from within the country. 10 (10) The Center for the Analysis of Terrorism 11 reports that nearly 15 terrorist organizations 12 throughout the world regularly have recourse in 13 large proportions to smuggling and counterfeiting 14 cigarettes to be financed, in particular the Pakistani 15 Taliban, Lashkar-E–Taiba, Al-Qaida au Maghreb 16 Islamique, Hezbollah, Hamas, the Revolutionary 17 Armed Forces of Colombia, the Kurdistan Workers’ 18 Party, Euskadi Ta Askatasuna, and the Irish Re- 19 publican Army. 20 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 6 •S 1965 IS SEC. 4. DESIGNATION OF AND ACTIONS WITH RESPECT TO 1 FOREIGN COUNTRIES ENGAGED IN ILLICIT 2 TRADE IN TOBACCO PRODUCTS OR THEIR 3 PRECURSORS. 4 (a) DESIGNATION.—Not later than one year after the 5 date of the enactment of this Act, and annually thereafter, 6 the Secretary of State, in consultation with the Secretary 7 of Defense, the Attorney General, and the Secretary of 8 the Treasury, shall— 9 (1) review the status of illicit trade in tobacco 10 products or their precursors in each foreign country 11 to determine whether— 12 (A) the country is a major source, point of 13 transit, or consumer of illicit tobacco products 14 or their precursors; or 15 (B)(i) the country meets the criteria of 16 subparagraph (A); and 17 (ii) the government of the country has ac- 18 tively engaged in or knowingly profited from the 19 illicit trade in tobacco products or their precur- 20 sors; 21 (2) designate each foreign country that— 22 (A) meets the criteria of subparagraph (A) 23 of paragraph (1) as a focus country for illicit 24 trade in tobacco products or their precursors 25 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 7 •S 1965 IS for purposes of providing assistance to the 1 country under subsection (b); and 2 (B) meets the criteria of subparagraph (B) 3 of paragraph (1) as a country of concern for il- 4 licit trade in tobacco products or their precur- 5 sors for purposes of withholding United States 6 development assistance and security assistance 7 to the country under subsection (c); and 8 (3) submit to the appropriate congressional 9 committees a report that includes— 10 (A) a list that identifies each foreign coun- 11 try designated as a focus country for illicit 12 trade in tobacco products or their precursors 13 under paragraph (2)(A); and 14 (B) a list that identifies each foreign coun- 15 try designated as a country of concern for illicit 16 trade in tobacco products or their precursors 17 under paragraph (2)(B). 18 (b) ASSISTANCE TO FOCUS COUNTRIES.— 19 (1) LAW ENFORCEMENT PROFESSIONAL TRAIN- 20 ING.—The Secretary of State, in coordination with 21 the heads of other relevant United States depart- 22 ments and agencies and nongovernmental organiza- 23 tions where appropriate, is authorized to provide as- 24 sistance to foreign countries designated as focus 25 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 8 •S 1965 IS countries for illicit trade in tobacco products or their 1 precursors under subsection (a)(2)(A) to improve the 2 effectiveness of law enforcement to combat the illicit 3 trade in tobacco products or their precursors. 4 (2) INVESTIGATIVE CAPACITY BUILDING.—The 5 Secretary of State, in coordination with the heads of 6 other relevant United States departments and agen- 7 cies, is authorized to establish and carry out pro- 8 grams to increase the capacity of law enforcement 9 and customs and border security offices in foreign 10 countries designated as focus countries for illicit 11 trade in tobacco products or their precursors under 12 subsection (a)(2)(A). 13 (c) PROHIBITION ON ASSISTANCE TO COUNTRIES OF 14 CONCERN.— 15 (1) IN GENERAL.—The Secretary of State may 16 not provide development assistance or security as- 17 sistance to foreign countries designated as countries 18 of concern for illicit trade in tobacco products or 19 their precursors under subsection (a)(2)(B). 20 (2) WAIVER.—The Secretary of State may 21 waive the application of paragraph (1) with respect 22 to a foreign country described in paragraph (1) if 23 the Secretary determines and certifies to the appro- 24 priate congressional committees that such waiver is 25 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 9 •S 1965 IS in the national security interests of the United 1 States. 2 (3) DEFINITIONS.—In this subsection: 3 (A) DEVELOPMENT ASSISTANCE.—The 4 term ‘‘development assistance’’ means assist- 5 ance authorized under— 6 (i) chapter 1 or 10 of part I of the 7 Foreign Assistance Act of 1961 (22 U.S.C. 8 2151 et seq. or 2293 et seq.); or 9 (ii) chapter 4 of part II of such Act 10 (22 U.S.C. 2346 et seq.). 11 (B) SECURITY ASSISTANCE.—The term 12 ‘‘security assistance’’ means assistance author- 13 ized under part II of the Foreign Assistance 14 Act of 1961 (22 U.S.C. 2301 et seq.). 15 SEC. 5. IMPOSITION OF SANCTIONS WITH RESPECT TO FOR- 16 EIGN PERSONS RESPONSIBLE FOR ILLICIT 17 TRADE IN TOBACCO PRODUCTS OR THEIR 18 PRECURSORS. 19 (a) IN GENERAL.—The President is authorized to 20 impose the sanctions described in subsection (b) with re- 21 spect to any foreign person the President determines, 22 based on credible evidence— 23 (1) is responsible for illicit trade in tobacco 24 products or their precursors; 25 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 10 •S 1965 IS (2) acted as an agent of or on behalf of a for- 1 eign person in a matter relating to an activity de- 2 scribed in paragraph (1); 3 (3) is a government official, or a senior asso- 4 ciate of such an official, that is responsible for, or 5 complicit in, ordering, controlling, or otherwise di- 6 recting, the illicit trade in tobacco products or their 7 precursors, including acts of significant corruption, 8 bribery, or the facilitation or transfer of the pro- 9 ceeds of corruption to foreign jurisdictions; or 10 (4) has materially assisted, sponsored, or pro- 11 vided financial, material, or technological support 12 for, or goods or services in support of, an activity 13 described in paragraph (1), (2), or (3). 14 (b) SANCTIONS DESCRIBED.—The sanctions de- 15 scribed in this subsection are the following: 16 (1) INADMISSIBILITY TO UNITED STATES.—In 17 the case of a foreign person who is an individual— 18 (A) ineligibility to receive a visa to enter 19 the United States or to be admitted to the 20 United States; or 21 (B) if the individual has been issued a visa 22 or other documentation, revocation, in accord- 23 ance with section 221(i) of the Immigration and 24 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 11 •S 1965 IS Nationality Act (8 U.S.C. 1201(i)), of the visa 1 or other documentation. 2 (2) BLOCKING OF PROPERTY.— 3 (A) IN GENERAL.—The blocking, in ac- 4 cordance with the International Emergency 5 Economic Powers Act (50 U.S.C. 1701 et seq.), 6 of all transactions in all property and interests 7 in property of a foreign person if such property 8 and interests in property are in the United 9 States, come within the United States, or are or 10 come within the possession or control of a 11 United States person. 12 (B) INAPPLICABILITY OF NATIONAL EMER- 13 GENCY REQUIREMENT.—The requirements of 14 section 202 of the International Emergency 15 Economic Powers Act (50 U.S.C. 1701) shall 16 not apply for purposes of this section. 17 (C) EXCEPTION RELATING TO IMPORTA- 18 TION OF GOODS.— 19 (i) IN GENERAL.—The authority to 20 block and prohibit all transactions in all 21 property and interests in property under 22 subparagraph (A) shall not include the au- 23 thority to impose sanctions on the importa- 24 tion of goods. 25 VerDate Sep 11 2014 04:45 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1965.IS S1965 kjohnson on DSK79L0C42 with BILLS 12 •S 1965 IS (ii) GOOD DEFINED.—In this subpara- 1 graph, the term ‘‘good’’ means any article, 2 natural or man-made substance, supply or 3 manufactured product, including inspection 4 and test equipment, and excluding tech- 5 nical data. 6 (c) CONSIDERATION OF CERTAIN INFORMATION IN 7 IMPOSING SANCTIONS.—In determining whether to im- 8 pose sanctions under subsection (a), the President shall 9 consider— 10 (1) information provided by the chairperson and 11 ranking member of each of the appropriate congres- 12 sional committees; and 13 (2) credible information obtained by other coun- 14 tries and nongovernmental organizations that mon- 15 itor violations of human rights. 16 (d) REQUESTS BY CHAIRPERSON AND RANKING 17 MEMBER OF APPROPRIATE CONGRESSIONAL COMMIT- 18 TEES.—Not later than 120 days after receiving a written 19 request from the chairperson and ranking member of one 20 of the appropriate congressional committees with respect 21 to whether a foreign person has engaged in an activity 22 described in subsection (a), the President shall— 23 (1) determine if that person has engaged in [Text truncated for display. 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