DHL Won't Haul Web Cigarettes

Working with shipper better than playing Whack-a-Mole to stem problem

Published in CSP Daily News

ALBANY, N.Y. -- New York Attorney General Eliot Spitzer said major package delivery company DHL has agreed to cease all deliveries of cigarettes to individual consumers throughout the United States. The agreement marks the latest step in an ongoing effort by state and federal law enforcement officials to halt the illegal sale of cigarettes over the Internet.

"By taking proactive steps to prevent delivery of cigarettes to individuals nationwide, DHL has made clear that it does not want to be affiliated with the illegal cigarette traffickers," [image-nocss] Spitzer said. "We hope other shippers will follow DHL's lead and refuse to do business with Internet and mail order cigarette retailers who routinely flout the law."

We don't want people using DHL if they are going to avoid paying taxes or ship to minors, said Michael King, senior legal counsel for the express shipping firm, in a report by Newsday.

The agreement that we are announcing today is not based on a lawsuit. It's not based on a threat of lawsuit, Mark Violette, spokesperson for the Spitzer's office, told the newspaper. We simply worked with DHL to make them aware that the industry for which they are shipping is an illegal industry.

The number of online tobacco sellers has been proliferating rapidly, Violette said, and attempting to shut them down individually would be too difficult. It's like playing Whack-a-Mole; you just whack one, and another one pops up, he told the paper. Rather than playing Whack-a-Mole, it was more judicious use of our resources to work with the shippers.

Audrey Silk, founder of New York City's Citizens Lobbying Against Smoker Harassment (CLASH), a group that advocates for smokers, told the paper, DHL has crumbled under the bullying of a powerful person and a powerful office to go along with what we deem is a denial of free commerce.

Jon Olin, general counsel for Plantation, Fla.-based DHL, said, "Wherever DHL does business in the United States or around the world, we look to work in partnership with government to ensure the best interests of our customers and the community at large are served. By taking a proactive approach, DHL is pleased to be the leader in the prevention of illegal cigarette sales in the United States."

The operations of virtually all Internet and mail-order cigarette retailers violate federal, state and local laws, including tax laws, age verification laws, delivery restrictions and reporting requirements, as well as federal wire fraud and mail fraud statutes, Spitzer's office said. Since 2004, a coalition of law enforcement officials has been working to stop these illegal sales. This has included state and federal criminal indictments of cigarette sellers, seizures of contraband cigarettes and efforts to strengthen cigarette trafficking prohibitions.

Law enforcement officials also have reached out to legitimate businessesincluding tobacco manufacturers, credit card companies and package delivery companiesthe services of which are used by the cigarette traffickers to conduct their illegal operations.

In March, as reported in CSP Daily News, state attorneys general and the federal Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) announced a landmark agreement in which all major credit card companies agreed to take steps to stop the use of their credit cards for these illegal sales.

DHL is the first major package delivery service to join with law enforcement in this effort, Spitzer's office said. The agreement does not prohibit DHL from making lawful shipments of cigarettes to licensed tobacco businesses and other authorized recipients.

Discussions with other major parcel delivery companies are ongoing.

Spitzer has also called upon the U.S. Postal Service to halt illegal shipments of cigarettes. He noted that while the Postal Service's enforcement division has been a strong partner in the effort, the Postal Service's delivery operations, inexplicably, have refused to take appropriate action, he said. Spitzer has urged Congress to adopt legislation banning the direct shipment of cigarettes to consumers.

FedEx spokesperson Kristin Krause told Newsday her company only delivers cigarettes to licensed entities, not to individuals. We don't deliver to consumers. Never have, she said.

Peggy Gardner, a spokesperson for UPS, said she could not comment on the specifics of discussions with Spitzer's office. She said that UPS does ship to individual consumers, but only through licensed cigarette dealers who are expected to follow the laws as they apply in various states, and in New York such online shipments are illegal.

Click here to view DHL's agreement.