Welcome to the newest post in our blog series, Compliance Corner. We frequently provide member-only regulatory toolkits on key regulatory truckstop and travel plaza issues on NATSO’s website. Perodically, we feature a snapshot of the full toolkit here on the blog.
All retailers that sell tobacco are subject to sales and marketing restrictions. Punishments for violations are severe. It is imperative that all NATSO members that carry tobacco products understand their legal obligations as tobacco retailers.
There are several key issues operators should be aware of.
Regulatory Obligations: In 2009, Congress passed the Family Smoking Prevention and Tobacco Control Act, which gives the Food and Drug Administration the authority to regulate the manufacture, marketing and retail sale of cigarettes and smokeless tobacco products. The FDA is also attempting to expand its authority to cover e-cigarettes as well as traditional cigarettes. This could subject e-cigarettes to similar sales and marketing restrictions that are currently applicable to cigarettes.
Undercover Inspections: The FDA is currently working with state enforcement agencies to conduct undercover inspections of tobacco retailers to ensure that they are complying with federal requirements. At the current time, these inspections cover underage sales, age verification, free samples, tobacco discounts and self-service displays.
Tobacco retailers that are fined for failing an FDA inspection must respond within 30 days of receiving the complaint. In responding, tobacco retailers will generally have five options at their disposal: pay the fine in full; request a conference with the FDA to negotiate a settlement; request a hearing before an administrative law judge to challenge the validity of the allegation; request an extension of time to respond for good cause; or do nothing and be subject to a default judgment.
Violations: In considering how to respond to a fine and/or complaint, there are several things tobacco retailers should consider. The Family Smoking Prevention and Tobacco Control Act contains a penalty structure under which penalties increase in severity for each successive violation a retailer commits—committing one violation will lead to increased penalties for future violations. This is designed to enable tobacco retailers to correct problems as they are discovered.
In addition, tobacco retailers should only be subject to a single violation for each inspection. In other words, FDA should not penalize tobacco retailers for committing multiple violations resulting from a single inspection. More specifically, no tobacco retailer should be fined an amount greater than $250 for its first fine, and no more than $500 for its second fine.
Employee Training: Retailers should also consider implementing a tobacco training program for employees, which can help protect the business and its customers. The FDA provides for less severe penalties when retailers have in place an adequate training program for employees. These lower penalties include a warning letter for the first violation (rather than a fine) and lower fines for subsequent violations than would be levied if the retailer did not have an adequate training program in place.
The FDA has yet to institute any regulations regarding what types of training programs are considered “adequate” so as to trigger a less severe penalty. Until it does, the agency will be subjecting all retailers to the reduced penalty schedule as though they had an adequate training program in place.
// NATSO Members: Get the Full Regulatory Toolkit. NATSO has prepared a document outlining these issues and more. The full document is available to NATSO members here.
(The regulatory toolkit is available for NATSO Members only. If you need any assistance logging in, please contact NATSO Member Services at (703) 549-2100 between the hours of 9:00 a.m. and 5:00 p.m. EST, Monday through Friday, or e-mail us at membership@natso.com.)
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