FedEx Bolsters Cigarette Restrictions

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FedEx Express and FedEx Ground agreed to take disciplinary action against companies that ship cigarettes directly to consumers, New York Attorney General Eliot Spitzer said this week. The disciplinary action includes termination of services for repeat violators.


FedEx also will work with the attorney general's office to track down shippers trafficking in illegal cigarette sales. The agreement is part of a continuing effort to end the sale and shipment of contraband cigarettes over the Internet and through the mail.


Internet and mail-order cigarette retailers operate in violation of federal, state and local laws, including tax laws, age verification laws, delivery restrictions, reporting requirements and federal wire fraud and mail fraud statutes, Spitzer said.


In 2005, DHL and UPS agreed to cease delivery of cigarettes to consumers. That year, the major credit card companies agreed to take steps to ensure that their systems are not used to process payments that further illegal cigarette sales. Philip Morris USA reached an agreement last month with a coalition of 37 attorneys general to reduce the supply of PM USA cigarettes to those engaged in such illegal sales.


Spitzer said Congress needs to address the U.S. Postal Service, which still delivers cigarettes because of a loophole.


"The postal service effectively has become the delivery arm of a massive criminal enterprise shipping contraband cigarettes nationwide," he said in a statement. "I have nothing but praise for the efforts [of] the U.S. Postal Inspection Service, which is working with us to stop these traffickers, but they have a nearly impossible task. Congress needs to address this problem now."


The USPS adopted a policy last fall recognizing that it "cannot knowingly permit the mails to be used to further activities deemed unlawful by state and federal authorities." However, its policy authorizes postal employees to accept packages "suspected of containing untaxed or under-taxed cigarettes."


Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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