TESTIMONY OF JOHN C KEENEY, DEPUTY ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, BEFORE US HOUSE SUBCOMMITTEE ON CRIME ON H R 8853 AND H R 10066, MARCH 8, 1978

• NCJ Number: 45743
• Author(s): J C KEENEY
• Date Published: 1978
• Length: 6 pages
• Corporate Author: US Dept of Justice
• Sale Source: National Institute of Justice/
• Publication Type: Legislative/Regulatory Material
• Language: English
• Country: United States of America

Annotation

CHANGES ARE SUGGESTED IN TWO BILLS DEALING WITH CIGARETTE SMUGGLING TO ENCOURAGE THE STATE TO ENFORCE THE LAW AND TO CLARIFY FEDERAL AUTHORITY TO INTERVENE.

Abstract

THE PRESENT JENKINS ACT, SECTIONS 375 THROUGH 378, TITLE 15, HAS PROVED TO BE OF LIMITED EFFECTIVENESS IN DEALING WITH INTERSTATE SMUGGLING OF CIGARETTES, AN ACTIVITY WHICH IS INVOLVING ORGANIZED CRIME. UNDER PRESENT LAW PERSONS SHIPPING TO A DISTRIBUTOR MUST NOTIFY TAXING AUTHORITIES OF THE RECEIVING STATE OF THE SHIPMENT; PENALTY FOR FAILURE TO FILE THE REQUIRED REPORTS IS 6 MONTHS IN JAIL AND A FINE OF $1,000. THE BILL, H.R. 10066, ATTEMPTS TO EQUALIZE STATE TAXES ON CIGARETTES TO REMOVE THE PROFITABILITY OF THIS SMUGGLING. THE JUSTICE DEPARTMENT HAS NO COMMENT ON THIS. THE ENFORCEMENT PROVISIONS OF H.R. 10066 AND H.R. 8853 ARE ALMOST IDENTICAL. THEY OUTLAW THE SHIPMENT OF NON-TAX-PAID CIGARETTES AND MAKE BOTH FALSE STATEMENTS AND FALSE RECORDS IN CONNECTION WITH SUCH SHIPMENTS CRIMINAL ACTS. ORDINARILY THE DEPARTMENT OF JUSTICE HAS OPPOSED FEDERAL INTERVENTION IN STATE TAX MATTERS. HOWEVER, THE ENTRY OF ORGANIZED CRIME INTO THIS AREA HAS LED THE DEPARTMENT TO SUPPORT ENACTMENT OF H.R. 8853 IF IT IS MODIFIED TO IMPROVE ITS POTENTIAL EFFECTIVENESS IN DEALING WITH ORGANIZED CRIME PROBLEMS. THE FIRST PROPOSED CHANGE IS TO INCREASE THE NUMBER OF CIGARETTES NECESSARY TO TRIGGER APPLICATION OF THE STATUTE TO 30,000 CIGARETTES (150 CARTONS) INSTEAD OF 20,000. THIS RECOGNIZES THAT SO LONG AS A CIGARETTE TAX DISPARITY EXISTS, CASUAL SMUGGLING WILL TAKE PLACE; SUCH CASUAL CONTRABAND SHOULD BE A STATE PROBLEM. THE SECOND CHANGE IS TO ELIMINATE THE WORD 'DEALER,' WHICH WILL POSE UNDUE ENFORCEMENT PROBLEMS. INSTEAD THE LAW SHOULD APPLY TO ANYONE WHO HANDLES THE PREREQUISITE QUANTITY OF CIGARETTES. THIRD, THE PENALTY SHOULD BE INCREASED TO 5 YEARS AND A $10,000 FINE IN RECOGNITION OF THE FACT THAT THE DEPARTMENT OF JUSTICE WILL AUTHORIZE PROSECUTION ONLY WHEN, IN ITS JUDGMENT, ORGANIZED CRIME IS INVOLVED. (GLR)