PART 646—CONTRABAND CIGARETTES AND SMOKELESS TOBACCO Authority: 18 U.S.C. 2341-2346, unless otherwise noted. Source: 45 FR 48612, July 21, 1980, unless otherwise noted. Redesignated by T.D. ATF-487, 68 FR 3753, Jan. 24, 2003. Editorial Note: Nomenclature changes to part 646 appear by T.D. ATF-487, 68 FR 4753, Jan. 24, 2003. General § 646.141 Scope of part. The regulations in this part relate to delivery sales of smokeless tobacco and cigarettes, and to distributing, either in a single transaction or cumulatively, more than 10,000 cigarettes or 500 single-unit consumer-sized cans or packages of smokeless tobacco within a single month. [ATF 2006R-1F, 91 FR 25131, May 8, 2026] § 646.142 Territorial extent. The provisions of the regulations in this part apply in the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and the Virgin Islands. § 646.143 Meaning of terms. When used in this part, terms are defined as follows in this section. Words in the plural shall include the singular, and vice versa. Words indicating the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude other things not named which are in the same general class or are otherwise within the scope of the term defined. Appropriate ATF officer. Business premises. Cigarette. (1) Any roll of tobacco wrapped in paper or in any substance not containing tobacco; and (2) Any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in paragraph (1) of this definition. Common or contract carrier. Contraband cigarettes. (1) The cigarettes bear no evidence that applicable state or local cigarette taxes in the state or locality where such cigarettes are found has been paid; (2) The state or local government in which the cigarettes are found requires a stamp, impression, or other indication to be placed on packages or other containers of cigarettes to evidence payment of cigarette taxes; and (3) The cigarettes are possessed by any person other than an exempted person. Contraband smokeless tobacco. Delivery sale. (1) The consumer submits the order for such sale by means of a telephone or other method of voice transmission, mail, the internet or other online service, or by any other means in which the consumer is not in the same physical location as the seller when the purchase or sales offer occurs; or (2) The cigarettes or smokeless tobacco are delivered through mail, common carrier, private delivery service, or any other means in which the consumer is not in the same physical location as the seller when the consumer physically obtains possession of the cigarettes or smokeless tobacco. Disposition. Distribute. Distributor. Exempted person. (1) With respect to cigarettes in excess of 10,000, any person who is: (i) Holding a permit issued pursuant to chapter 52 of the Internal Revenue Code of 1986 as a manufacturer of tobacco products or as an export warehouse proprietor; (ii) Operating a customs bonded warehouse pursuant to section 311 or section 555 of the Tariff Act of 1930 (19 U.S.C. 1311 or 1555); (iii) An agent of a tobacco products manufacturer, an export warehouse proprietor, or an operator of a customs bonded warehouse; (iv) A common or contract carrier transporting the cigarettes involved under a proper bill of lading or freight bill that states the cigarettes' quantity, source, and destination; (v) Licensed or otherwise authorized by the state in which the person possesses cigarettes to account for and pay cigarette taxes imposed by that state; and who has complied with the license or authorization's accounting and payment requirements with respect to the cigarettes involved; (vi) An officer, employee, or other agent of the United States or a state, or any department, agency, or instrumentality of the United States or a state (including any political subdivision of a state) possessing cigarettes in connection with performing official duties; or (vii) Operating within a foreign-trade zone established under 19 U.S.C. 81b, when the cigarettes involved have been entered into the zone under zone-restricted status or, in respect to foreign cigarettes, have been admitted into the zone but have not been entered into the United States. (2) With respect to smokeless tobacco in excess of 500 single-unit consumer-sized cans or packages, any person who is: (i) Holding a permit issued pursuant to chapter 52 of the Internal Revenue Code of 1986 as a tobacco products manufacturer or as an export warehouse proprietor; (ii) Operating a customs bonded warehouse pursuant to section 311 or section 555 of the Tariff Act of 1930 (19 U.S.C. 1311 or 1555); (iii) An agent of a tobacco products manufacturer, an export warehouse proprietor, or a customs bonded warehouse operator; (iv) A common or contract carrier transporting the smokeless tobacco under a proper bill of lading or freight bill that states the smokeless tobacco's quantity, source, and destination; (v) Licensed or otherwise authorized by the state in which the person possesses smokeless tobacco to account for and pays smokeless tobacco taxes imposed by that state; and who has complied with the license or authorization's accounting and payment requirements with respect to the smokeless tobacco involved; (vi) An officer, employee, or agent of the United States or a state, or any department, agency, or instrumentality of the United States or a state (including any political subdivision of a state) possessing smokeless tobacco in connection with performing official duties; or (vii) Operating within a foreign-trade zone established under 19 U.S.C. 81b, when the smokeless tobacco involved has been entered into the zone under zone-restricted status or, in respect to foreign smokeless tobacco, has been admitted into the zone but has not been entered into the United States. Person. Retail purchaser. Smokeless tobacco. State. [45 FR 48612, July 21, 1980, as amended by T.D. ATF-472, 67 FR 8881, Feb. 27, 2002; ATF 2013R-9F, 79 FR 46694, Aug. 11, 2014; ATF 2006R-1F, 91 FR 25131, May 8, 2026] Records and Reports § 646.146 General record-keeping and reporting requirements. (a) Persons subject to record-keeping requirements. (b) Reporting requirements and persons subject to them. (i) The person's beginning and ending inventories of cigarettes and cans or packages of smokeless tobacco (in total) for such month, including the cigarettes' or smokeless tobacco's manufacturer and brand family names, and the number of cigarettes or ounces of smokeless tobacco inventoried. (ii) The total quantity of cigarettes and cans or packages of smokeless tobacco—including the cigarettes' or smokeless tobacco's manufacturer and brand family names—the person received within such month from each other person (itemized by name and address). (iii) The total quantity of cigarettes and cans or packages of smokeless tobacco—including the cigarettes' or smokeless tobacco's manufacturer and brand family names—that the person disposed of within such month to each person (itemized by name and address) other than a retail purchaser. (2) Each person described in paragraph (b)(1) of this section must also submit a copy of each completed report to the attorneys general and the tax administrators of the States from where the deliveries or distributions both originated and concluded. (Approved by the Office of Management and Budget under control number 1140-[TBD]) [ATF 2006R-1F, 91 FR 25132, May 8, 2026] § 646.147 Required record-keeping information. (a) Distributors who are exempted persons. (1) For each disposition of more than 10,000 cigarettes, or 500 single-unit consumer-sized cans or packages of smokeless tobacco, to an exempted person; or for each disposition of more than 10,000 cigarettes, or 500 single-unit consumer-sized cans or packages of smokeless tobacco, to a person who is not an exempted person, which is delivered by the distributor to the recipient's place of business, the distributor must show on dated records— (i) The full name of the purchaser (or the recipient if there is no purchaser); (ii) The street address (including city and State) to which the cigarettes or smokeless tobacco are destined; and (iii) The quantity of cigarettes or smokeless tobacco disposed of. (2) For each disposition of more than 10,000 cigarettes, or 500 single-unit consumer-sized cans or packages of smokeless tobacco, other than the dispositions specified in paragraph (a)(1) of this section, the distributor must show on dated records— (i) The full name of the purchaser (if any); (ii) The name, address (including city and state), and signature of the person receiving the cigarettes or smokeless tobacco; (iii) The street address (including city and state) to which the cigarettes or smokeless tobacco are destined; (iv) The quantity of cigarettes or smokeless tobacco disposed of; (v) The driver's license number of the individual receiving the cigarettes or smokeless tobacco; (vi) The license number of the vehicle in which the cigarettes or smokeless tobacco are removed from the distributor's business premises; (vii) A declaration by the individual receiving the cigarettes or smokeless tobacco of the specific purpose for the items (such as personal use, resale, delivery to another person, etc.); and (viii) A declaration, by the person receiving the cigarettes or smokeless tobacco when acting as an agent, of the name and address of their principal. (b) Distributors who are not exempted persons. (Approved by the Office of Management and Budget under control number 1140-[TBD] [ATF 2006R-1F, 91 FR 25132, May 8, 2026] § 646.150 Retaining records. (a) General. (b) Shorter retention periods. (1) The distributor requesting the shorter retention period is an agent of a tobacco products manufacturer; (2) The tobacco products manufacturer will retain the required record for each disposition of more than 10,000 cigarettes, or 500 single-unit consumer-sized cans or packages of smokeless tobacco, from the agent's premises for the full retention period specified in paragraph (a) of this section; and (3) The approval of a shorter retention period will not unduly hinder the administration of enforcement of this subpart. (c) Application requirements. [45 FR 48612, July 21, 1980, as amended by T.D. ATF-472, 67 FR 8880, 8881, Feb. 27, 2002; ATF 2006R-1F, 91 FR 25133, May 8, 2026] Other Provisions Relating to Distributing Cigarettes and Smokeless Tobacco § 646.153 Authority of appropriate ATF officers to enter business premises. Any ATF officer may, during normal business hours, enter the business premises of any person described in § 646.146 to inspect the records required under §§ 646.146 and 646.147, or to inspect any cigarettes or smokeless tobacco kept or stored by the person at the premises. [ATF 2006R-1F, 91 FR 25133, May 8, 2026] Penalties and Forfeitures § 646.154 Penalties. (a) Any person who knowingly ships, transports, receives, possesses, sells, distributes, or purchases contraband cigarettes or contraband smokeless tobacco shall be fined not more than $100,000 or imprisoned not more than five years, or both. (b) Any person who knowingly violates any regulation contained in this part or makes any false statement or misrepresentation with respect to the information required to be recorded by this part shall be fined not more than $5,000 or imprisoned not more than three years, or both. [45 FR 48612, July 21, 1980, as amended by ATF 2006R-1F, 91 FR 25133, May 8, 2026] § 646.155 Forfeitures. (a) Any contraband cigarettes or contraband smokeless tobacco involved in any violation of the provisions of 18 U.S.C. chapter 114 are subject to seizure and forfeiture. The provisions of 18 U.S.C. chapter 46 relating to civil forfeitures extend to any seizure or civil forfeiture under this section. Any cigarettes or smokeless tobacco so seized and forfeited must be either— (1) Destroyed and not resold; or (2) Used for undercover investigative operations for detecting and prosecuting crimes, and then destroyed and not resold. (b) Any vessel, vehicle, or aircraft used to transport, carry, convey, conceal, or possess any contraband cigarettes or contraband smokeless tobacco with respect to which there has been committed any violation of any provision of 18 U.S.C. chapter 114 or the regulations in this part is subject to seizure and forfeiture pursuant to 49 U.S.C. 80302-03. The provisions of 18 U.S.C. chapter 46 relating to civil forfeitures extend to any seizure or civil forfeiture under this section. [ATF 2006R-1F, 91 FR 25133, May 8, 2026]