Cigars, Cigar Information and where to find Premium Cigars, Discounted Cigars and even Cheap Cigars - FDA REGULATION OF TOBACCO ELIMINATED FROM MASSIVE TAX BILL

FDA REGULATION OF TOBACCO ELIMINATED FROM MASSIVE TAX BILL

FDA REGULATION OF TOBACCO ELIMINATED FROM MASSIVE TAX BILL

New government regulations eliminate imports of any cigars from Cuba

Los Angeles, October 7 – A bitterly-fought negotiation in a Congressional conference committee ended with a lengthy U.S. tax bill that includes the so-called tobacco “buyout” and excludes provisions that would have given the U.S. Food and Drug Administration regulatory powers over tobacco.

In voting held on Tuesday evening, the Associated Press reported that the version of the bill submitted by House Ways and Means Committee chairman Bill Thomas (R-California) – with the tobacco buyout, but without FDA regulation – was approved. House conferees were able to defeat all but two minor amendments to the bill.

The tobacco buyout program did change in conference, however, as the House bill originally envisioned paying for the $10.14 billion program from general government funds, while the Senate wanted tobacco companies – including cigar manufacturers and importers – to pay. The version reported out of conference has tobacco companies paying for the buyout over a 10-year period. One industry source estimated the cost to cigar makers at $28.3 million per year, about 10 cents per stick if imports continue to rise to the 280-300 million level this year.

The House could take up the bill (as reported out of conference) today and the Senate could begin consideration tomorrow. Some senators have promised a filibuster because of the lack of FDA regulation, but there is enormous pressure to pass it because of its main provisions dealing with a rising penalty tariff imposed by the European Union on hundreds of U.S. companies because of an export subsidy ruled illegal by the World Trade Organization.

“I wasn’t going to let unrelated matters get in the way,” emphasized Sen. Charles Grassley (R-Iowa), noting the importance of fixing the WTO subsidy problem above all other considerations.

U.S. President George W. Bush has indicated that he would sign a bill with the tobacco buyout included.

From the Cubador:
“There is now an across the board ban on the importation into the United States of Cuban-origin cigars and other Cuban-origin tobacco products, as well as most other products of Cuban origin.”

So begins a special release, issued Tuesday, by the Office of Foreign Assets Control (“OFAC”), the department of the U.S. Treasury responsible for import controls related to the U.S. trade embargo with Cuba.

As a part of the well-publicized tightening of the embargo, OFAC’s new rules effectively make it illegal to acquire Cuban cigars in the U.S., irrespective of how the cigars come into the country: from individuals who have traveled to Cuba under U.S. license, by mail or Internet.

Prior to August 1, 2004, travelers licensed to go to Cuba by OFAC could bring back up to $100 worth of Cuban goods, including tobacco products and alcoholic beverages. Both of those items are now banned.

A stunning corollary to these regulations is the OFAC’s note that it is illegal for U.S. citizens (or permanent resident aliens) to purchase Cuban cigars – or other Cuban products – outside the U.S. for use outside the U.S. The cigars you bought on your last trip to London, smoked only in London . . . illegal! It’s an impossible regulation to enforce, of course, but the penalties range from $65,000 for civil penalties to criminal penalties of $250,000 (individual) to $1,000,000 (corporate) and up to six months in prison.

It’s an amazing irony, of course, that the U.S. has normalized trade relations with China and Vietnam, but maintains an embargo against Cuba. But that’s an issue for after next month’s elections.

Hammer time:
That humidor of 150 Partagas 150 cigars we have been tracking on eBay was pulled off-line on Monday after attracting no bids in its third appearance on the site. No word on whether it was sold separately.

Coming tomorrow: a surprise auction on an entire cigar brand, plus a 1910 silver “cigar service.”
~ Rich Perelman

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