Tag: U.S. Postal Service

  • Post Office to Publish ENDS Mailing Rules

    Post Office to Publish ENDS Mailing Rules

    Photo: F. Muhammad from Pixabay

    The United States Postal Service (USPS) is scheduled to publish in the Federal Register its rules for mailing electronic nicotine-delivery system (ENDS) products tomorrow, Feb. 19. The unpublished rule states that the prohibition on mailing ENDS will apply immediately “on and after” the date of the final rule.

    However, the Preventing Online Sales of E-Cigarettes to Children Act, which placed ENDS under the PACT Act, was enacted on Dec. 27, 2020, and becomes effective 90 days after enactment (March 27, 2021).

    Under the USPO rule, the agency will mail vapor products under narrowly defined circumstances:

    • Noncontiguous States: intrastate shipments within Alaska or Hawaii
    • Business/Regulatory Purposes: shipments transmitted between verified and authorized tobacco industry businesses for business purposes, or between such businesses and federal or state agencies for regulatory purposes
    • Certain Individuals: lightweight shipments mailed between adult individuals, limited to 10 per 30-day period
    • Consumer Testing: limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes
    • Public Health: limited shipments by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
    Azim Chowdhury

    The unpublished rules suggest that business-to-business shipments will be allowed. According to Azim Chowdhury, a partner at Keller and Heckman, the PACT Act has historically exempted business-to-business deliveries from the USPS ban. Specifically, the USPS ban does not extend to tobacco products mailed only for business purposes between legally operating businesses that have all applicable state and federal government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation or research.

    “Companies seeking to use USPS for business-to-business deliveries must first submit an application to the USPS Pricing and Classification Service Center and comply with several other shipping, labeling and delivery requirements,” said Chowdhury.

    The USPS rules also state that the listed exceptions cannot feasibly be applied to inbound or outbound international mail, mail to or from the Freely Associated States, or mail presented at overseas Army Post Office, Fleet Post Office, or Diplomatic Post Office locations and destined to addresses in the United States. Because of this inability, all ENDS products “in such mail are nonmailable, without exception.”

    In addition to the nonmailing provisions, the PACT Act requires anyone who sells cigarettes or smokeless tobacco to register with the Bureau for Alcohol, Tobacco and Firearms and the tobacco tax administrators of the states into which a shipment is made or in which an advertisement or offer is disseminated, according to Chowdhury. Retailers who ship cigarettes or smokeless tobacco to consumers are further required to label packages as containing tobacco, verify the age and identity of the customer at purchase, use a delivery method (other than the USPS) that checks ID and obtains an adult customer signature at delivery, and maintain records of delivery sales for a period of four years after the date of sale, among other things.

  • Small Business to Bear Brunt of U.S. Mail Ban

    Small Business to Bear Brunt of U.S. Mail Ban

    Photo: dference from Pixabay
    Azim Chowdhury

    The outlook for many small vapor companies and online retailers looks bleak following the enactment of new rules that prohibit the U.S. Postal Service (USPS) from shipping e-cigarettes, according to Keller and Heckman’s Azim Chowdhury and Galen Rende.

    Writing on The Continuum of Risk law blog, the attorneys discuss the fallout of a recent amendment to the 2009 All Cigarette Trafficking (PACT) Act.

    In late December, former U.S. President Donald Trump signed into law a $2.3 trillion coronavirus relief and government funding bill that contains a provision banning the USPS from delivering vapor products. The USPS was already prohibited from delivering cigarettes and smokeless tobacco products to consumers under the PACT Act. The law passed in December extends the Act’s original definition of “cigarette” to include electronic nicotine delivery systems (ENDS).

    Tobacco and vapor companies may use private services to ship their products to consumers, but the PACT Act requires them to register with the Bureau of Alcohol, Tobacco, Firearms and Explosives and the tobacco tax administrators of the states into which a shipment is made. Delivery sellers are further required to verify the age and identity of the customer at purchase and maintain records of delivery sales for a period of four years after the date of sale, creating substantial administrative burdens.

    Critically for the vapor industry, the most popular carriers, Federal Express and United Parcel Service, have recently announced that they would cease all deliveries of vapor products.

    The prohibition on the mailing of ENDS is scheduled to take effect after the USPS promulgates regulations clarifying the mail ban, which it is required to do within 120 days of the enactment—i.e., by April 27, 2021.

  • Trump Signs Ban on E-Cigarette Shipments

    Trump Signs Ban on E-Cigarette Shipments

    U.S. President Donald Trump signed a $2.3 trillion coronavirus relief and government funding bill into law Sunday night, averting a government shutdown that was set to begin on Tuesday.

    Initially, Trump had refused to sign the legislation, calling on Congress to increase stimulus payments from $600 to $2,000 and to get rid of “wasteful and unnecessary items.” The president signaled in a statement Sunday night that he signed the coronavirus relief bill only after securing a commitment for the Senate to consider legislation to increase stimulus checks.

    For the nicotine industry, the bill is significant because it contains a provision prohibiting the U.S. Postal Service from delivering e-cigarettes.

    It also subjects e-cigarettes to other rules that currently govern online cigarette sales. Among other things, online retailers will be required to use private shipping services that collect an adult signature at the point of delivery, collect all applicable local and state taxes, and send each taxing state’s tax administrator a list of all transactions with customers in their state.

    Critics said the legislation would place a considerable burden on vapor companies, increasing cost and paperwork.

    The new rules could go into effect as soon as 120 days.

  • Trump Sends Covid Relief Bill Back to Congress

    Trump Sends Covid Relief Bill Back to Congress

    Photo: Stevanovicigor | Dreamstime

    U.S. President Donald Trump has sent back to Congress a Covid-19 relief bill that included language to ban the U.S. Post Office (USPO) from mailing vapor products. Deriding the bill as a “disgrace,” Trump called on Congress to increase stimulus payments from $600 to $2,000 and to get rid of “wasteful and unnecessary items.”

    It was not immediately clear whether the president regards the USPO provision as wasteful or unnecessary.

    Trump’s position could threaten to torpedo the carefully drafted bill—a move that could lead to a government shutdown and send the economy into a tailspin if he carried through with a veto. However, few observers expect the president’s message to prompt a renegotiation of the measure, which passed with big veto-proof majorities.

    In addition to prohibiting USPO shipments, the Congress bill subjects e-cigarettes to other rules that currently govern online cigarette sales. Among other things, online retailers will be required to use private shipping services that collect an adult signature at the point of delivery, collect all applicable local and state taxes, and send each taxing state’s tax administrator a list of all transactions with customers in their state.

    Critics said the legislation would place a considerable burden on vapor companies.

  • Covid Bill Restricts Shipping of E-Cigarettes

    Covid Bill Restricts Shipping of E-Cigarettes

    Photo: dference from Pixabay

    The Covid-19 relief bill passed by the U.S. Congress on Dec. 21 prohibits the U.S. Postal Service from delivering packages containing e-cigarettes, reports The Winston Salem Journal.

    It also subjects e-cigarettes to other rules that currently govern online cigarette sales. Among other things, online retailers will be required to use private shipping services that collect an adult signature at the point of delivery, collect all applicable local and state taxes, and send each taxing state’s tax administrator a list of all transactions with customers in their state.

    Critics said the legislation would place a considerable burden on vapor companies.

    Stefanie Miller

    “We see this policy as mainly advancing the trend we’re already seeing in the market—which is that the large, well-capitalized manufacturers will be poised to pay the costs to be in compliance with the new more burdensome policies,” said FiscalNote analyst Stefanie Miller.

    “Meanwhile, smaller manufacturers and retailers likely fall short and will be forced to exit the market.”

    “If the increase in shipping costs wasn’t enough, the bill also imposes huge paperwork burdens on small retailers, and backs it up with threats of imprisonment for even innocent mistakes,” American Vaping Association President Gregory Conley said in a statement. “This is not a law designed to regulate the mail-order sale of vaping products to adults; it’s an attempt to eliminate it.”

    The new rules could go into effect as soon as 120 days.