Washington Lawyer about FDA and Pact Act

[lxskllr]

Somebody else comment on this. I would love some more input

I'm with you Dog, but the rules mean whatever they want them to mean. I wouldn't even be confident in taking the case to court. Not only does the small guy have to pay lawyers while the government's are free, there's no telling how badly interpretation will be warped by the judge.

[danielan]

Which part of PACT are you trying to get around Dog?

It seems like, if a foreign seller does not comply, and they get caught, then they go on the non-compliant sellers list after having a chance to explain themselves.

Being on this list means that no one (UPS or USPS) can deliver your packages to people in the US.

[GoVegan]

Unfortunately, the United States has arms that can reach around the world. When they went after the online gaming establishments they were taking everyone down everyone, including the payment processors, regardless of where they lived. It works like this. You get on some kind of justice department hit list and then as soon as you leave the country to say, conduct business in another country, they nab you at an airport in a country that is willing to work with us. US law is international law and we don't give a crap about the world court or anything like that.

[Snusdog]

Guys I'm not trying to get "around" anything. I am only saying that the law does not make the requirements of foreign sellers that it does for interstate sales. I'm pointing to the law and saying how does "A" mean "not A"

What I'm looking for is someone to point to the law and say "here, this is how"

To me the issue with Franks legal team is which term takes precedent-- the heading, i.e. the normal term of precedent (my reading) or a subsidiary term found under the qualification of the head term (their reading)

In the end, compliance is to be defined by what the law says. Determine the later and implement the former accordingly.

That is all I'm trying to do.

[danielan]

Guys I'm not trying to get "around" anything. I am only saying that the law does not make the requirements of foreign sellers that it does for interstate sale

Right, but which part? The Snus as non-mailable part?, the age-verification part?, the labeling provisions (the labels on the shipment boxes, not the warnings on the cans)?, the tax collection provisions? etc.

Or do you mean the whole thing? While a giant loop-hole would be cool, I don't see one. Even USPS and UPS involve a lot of interstate transportation in most cases.

PACT doesn't, IMO, make it a crime for a foreign company to send Snus to the US as I understand, since we have no jurisdiction over them.

But, on the non-mailable side they (USPS) can block it and/or go after the purchaser for causing it to be mailed.

On the UPS shipments, if they don't comply with labeling, age verification, etc then they get added to the list as non-compliant and then they get blocked, etc.

[Snusdog]

I am saying that PACT does not require state and local taxes to be collected by Foreign vendors or to be assessed on foreign sales. On the other hand the federal taxes and the collection of those taxes remain in place and unchanged.

All requirements concerning state taxes fall under the discussion concerning sales between states (Interstate Commerce).

The law simply does not address (or stipulate) foreign sales-- anywhere not once. The entirety of the law concerns sales made by sellers within the USA. Otherwise, why does it clarify and explain imports (imports would be assumed under the broader category of Commerce in General).

The rest of what Frank's Lawyers say I agree with

Thus 1-3 we agree. #4 we disagree

1. No FDA restrictions of Foreign vendors
2. No USPS (for anyone)
3. Private carriers (UPS) remain perfectly legal for both domestic and foreign sales
4. No collection of state or local taxes by foreign merchants (my point)

Now somebody show me why my above post is wrong. How does a law that does not mention foreign vendors once suddenly become all about foreign vendors by a single phrase under the clear heading of "Interstate Commerce"

[PipenSnus]

Snusdog, I agree with you that there are a lot of phrases in the PACT document that will probably have to be argued in US Federal courts, and decisions made regarding definitions, exceptions, restrictions, and so forth. That in itself could take years to sort out. Beyond that, there are questions of international law to be considered with regard to trade agreements between the countries involved in any international transaction. In addition, there's the question of how much of PACT will be enforced, or is even reasonably enforceable. There are lots of laws on the books which are usually ignored, for all sorts of reasons. And somehow I can't see Customs, Homeland Security, TSA, or any other Federal agency with jurisdiction over international shipments diverting much in the way of resources away from hunting for bombs and drugs, to devote to tracking down a few cans of tobacco here and there. Sure, they'll be out to collect import duties and taxes from major shipments to US snus distributors, but will they go after the little guy? I could be wrong, but I tend to think they won't.

[tom502]

Being this law was about trafficing, I am suprised it does not deal with international sales, as this is where everyone was getting their cigs from, overseas, like Thailand, and the Phillipines and such.

[danielan]

I am saying that PACT does not require state and local taxes to be collected by Foreign vendors or to be assessed on foreign sales.

This law is a mess IMO.

I've read it 10 times.

I think the way it will go down is that the Attorney General will add foreign sellers as well as domestic to the list of "non-registered and non-compliant" sellers. This might block delivery.

But your guess is as good as mine.

I suspect that sellers who are committed to delivering to the US will register and jump through the hoops. Others will just not bother with us. Some may make a few shipments, but not really care if your shipment gets seized or they get put on some US list.

[Snusdog]

I don't think there is even a system in place for foreign sellers to collect USA state taxes (the notion is just absurd-- we have Customs precisely because foreign merchants are not nor can they be required to collect US taxes).

I would just continue to comply with the shipping and Customs requirements and make someone tell you otherwise. However, my fear is that if Northerner begins sending each state money, it will set a president that will end up costing all of us (northerner included) more money NEEDLESSLY. Comply with what is specifically asked and no more. As of now I do not see compliance as including foreign merchants collecting taxes. At best Franks lawyers are assuming a breadth to the law that is not stated plainly.

You are right danielan the law is a mess. But it is not my responsibility to straighten it out. Therefore, where there is ambiguity I will choose the option that is most favorable to me and then wait until someone can make the less favorable view stick.

[Northerner.com]

According to the lawyer it's very clear that sellers outside the state also include international sellers. Our lawyer contacted people both in TTB and ATF and got a confirmation. We sent a request to our lawyer in order to understand what we should do - ship only from Sweden or our US warehouse and if we could continue selling unregistered FDA Snus (BAT, JTI and Skruf snus etc..). We now understand we can continue selling unregistered FDA snus but will have to add Federal tobacco tax, state tax and maybe even sales tax (we are still waiting for response about the sales tax).

We are just trying to follow the US law, I want to sleep good at night and being able to visit this wonderful country for the rest of my life. Snusdog is right we have got signs from different sources that the US government is serious about Pact Act. Our payment processors told us when we wanted to open a new account that we will have to follow the new US law, also FedEx here in Sweden received new regulations that export of snus to the US could only be done if the importer had an import license. I told them it must be a misunderstanding and they will get back to us on this issue. We also heard that tobacco companies within the US will monitor all snus sellers in order to see if they follow the Pact Act because none of them want to loose retail sales to foreign online snus vendors...

Anyway, whatever happens we will still be able to sell snus in the US because we will follow Pact Act and FDA regulations according to every point - but the effort one have to do in order to accomplish this - is to say the least "very hard work".

Have a great day!

Sincerely,
Frank

[Joe234]

Don't forget Oden's

thanks

[Snusdog]

Frank thank you so much for all the work. I know it is a big pain. I think this whole thing is a sham by US tobacco companies to drive competition from the market. Anyway I deeply appreciate all you are doing as I am sure the rest of the snuson community does. Keep up the good work and thanks for keeping us posted.

dog

[Simplysnus]

Frank thank you so much for all the work. I know it is a big pain. I think this whole thing is a sham by US tobacco companies to drive competition from the market. Anyway I deeply appreciate all you are doing as I am sure the rest of the snuson community does. Keep up the good work and thanks for keeping us posted.

dog

Definitely

[Snusdog]

I wrote the following email to the US Attorneys' General's office. I am waiting a reply and will post it here when it arrives. After which I will do my best to shut up about this whole thing.

Again thanks to Frank for all he is doing.

Dear Attorneys’ General,

I have a question regarding the PACT Act (S. 1147).

Does the Pact Act require Foreign Vendors selling to US customers for private consumption to collect the state and local taxes required of domestic sellers and vendors by the law or does the qualification “Interstate Commerce” limit this requirement to sales made within the jurisdictional boundaries of the USA.

In other words, does the heading “Interstate Commerce” in the definition section of the law limit and restrict the phrase “any place outside the state” in 1.9 (a) to any place outside the state within the jurisdictional boundaries of the USA (thus truly Interstate Commerce) or does the qualification “any place outside the state” redefine and expand the meaning of Interstate Commerce to include any commerce outside the state whatsoever without boundary or limitation (thus rendering the prefix Interstate a non descript qualification).

Thank you for your help in this matter.

Yours truly,



SEC. 2A. DELIVERY SALES.

‘(a) In General- With respect to delivery sales into a specific State and place, each delivery seller shall comply with--

‘(1) the shipping requirements set forth in subsection (b);

‘(2) the recordkeeping requirements set forth in subsection (c);

‘(3) all State, local, tribal, and other laws generally applicable to sales of cigarettes or smokeless tobacco as if the delivery sales occurred entirely within the specific State and place, including laws imposing--
‘(A) excise taxes;

‘(B) licensing and tax-stamping requirements;

‘(C) restrictions on sales to minors; and

‘(D) other payment obligations or legal requirements relating to the sale, distribution, or delivery of cigarettes or smokeless tobacco; and

‘(4) the tax collection requirements set forth in subsection (d).


SECTION 1. DEFINITIONS.
‘(9) INTERSTATE COMMERCE-

‘(A) IN GENERAL- The term ‘interstate commerce’ means commerce between a State and any place outside the State, commerce between a State and any Indian country in the State, or commerce between points in the same State but through any place outside the State or through any Indian country.

‘(B) INTO A STATE, PLACE, OR LOCALITY- A sale, shipment, or transfer of cigarettes or smokeless tobacco that is made in interstate commerce, as defined in this paragraph, shall be deemed to have been made into the State, place, or locality in which such cigarettes or smokeless tobacco are delivered.