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Compliance Corner: Understanding Requirements Surrounding Tobacco at Your Truckstop

Posted in: Compliance Corner

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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. 

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// 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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About the Author

David Fialkov

David Fialkov

David Fialkov is the Vice President of Government Relations, as well as the Legislative and Regulatory Counsel, at NATSO.  In this capacity, Mr. Fialkov direct's NATSO's legislative, regulatory, and legal strategy on a range of issues, including transportation, energy and fuels, labor, data security, and taxes.  Mr. Fialkov also oversees NATSO's political engagement program, including individualized legal and political counsel to member companies.
 
Prior to joining NATSO, Mr. Fialkov was the senior associate in the Government Affairs and Public Policy practice at the law firm of Steptoe and Johnson in Washington, D.C.  At Steptoe, Mr. Fialkov advised clients on legislative, regulatory, and political issues, as well as legal concerns.  His primary clients included trade associations representing the motor fuel wholesale and retail industries, including the National Association of Convenience Stores and the Society of Independent Gasoline Marketers of America.  Mr. Fialkov's focus was not only on the motor fuels business, but also the litany of other issues that retailers confront, including labor matters, foodservice issues, healthcare and employment issues, tax matters and data security.
 
Prior to joining Steptoe, Mr. Fialkov graduated with honors from George Washington University Law School.  He received his B.S. Summa cum laude with highest honors from Clark University in Worcester, MA.  He lives in Washington, D.C. with his wife Allison and daughter Lilah.