Code of Virginia

Code of Virginia
Title 3.2. Agriculture, Animal Care, and Food
1/23/2020

Article 3. Enforcement of Requirements for Tobacco Product Manufacturers.

§ 3.2-4204. Definitions.

As used in this article:

"Brand family" means all styles of cigarettes sold under the same trademark and differentiated from one another by means of additional modifiers or descriptors, including, but not limited to, "menthol," "lights," "kings," and "100s" and includes any brand name alone or in conjunction with any other word, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or any other indicia of product identification identical or similar to, or identifiable with, a previously known brand of cigarettes.

"Commissioner" means the Tax Commissioner of the Department of Taxation.

"Nonparticipating manufacturer" means any tobacco product manufacturer that is not a participating manufacturer.

"Participating manufacturer" shall have the meaning provided in section II (jj) of the Master Settlement Agreement.

"Stamping agent" means (i) a person who is authorized by the Tax Commissioner pursuant to § 58.1-1011 to affix Virginia tax stamps to packages, packs, cartons, or other containers of cigarettes; or (ii) any person who is required to pay the excise tax imposed on cigarettes pursuant to § 58.1-1001.

Terms defined in § 3.2-4200 shall have the same meaning when used in this article.

2003, c. 798, § 3.1-336.3; 2004, c. 1029; 2006, c. 674; 2008, c. 860.

§ 3.2-4205. Certifications.

A. Every tobacco product manufacturer whose cigarettes are sold in the Commonwealth whether directly or through a distributor, retailer or similar intermediary or intermediaries shall execute and deliver on a form prescribed by the Attorney General, requesting such information as the Attorney General deems reasonably necessary to enable him to make the determinations required in § 3.2-4206, a certification to the Attorney General no later than the thirtieth day of April each year, certifying under penalty of perjury that, as of the date of such certification, such tobacco product manufacturer either: (i) is a participating manufacturer and has made all payments calculated by the independent auditor to be due from it under the Master Settlement Agreement, except to the extent it is disputing any of such payments; or (ii) is in full compliance with Article 1 (§ 3.2-4200 et seq.) of this chapter.

B. A participating manufacturer shall include in its certification a list of its brand families. The participating manufacturer shall update such list 30 days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the Attorney General.

C. A nonparticipating manufacturer shall include in its certification a complete list of all of its brand families (i) separately listing brand families of cigarettes and the number of units sold for each brand family that were sold in the Commonwealth during the preceding calendar year, (ii) that have been sold in the Commonwealth at any time during the current calendar year, (iii) indicating by an asterisk, any brand family sold in the Commonwealth during the preceding calendar year that is no longer being sold in the Commonwealth as of the date of such certification, and (iv) identifying by name and address, any other manufacturer of such brand families in the preceding calendar year. The nonparticipating manufacturer shall update such list 30 days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the Attorney General.

D. In the case of a nonparticipating manufacturer, such certification shall further certify:

1. That such nonparticipating manufacturer is registered to do business in the Commonwealth or has appointed a resident agent for service of process and provided notice thereof as required by § 3.2-4208;

2. That such nonparticipating manufacturer has (i) established and continues to maintain a qualified escrow fund as that term is defined in Article 1 (§ 3.2-4200 et seq.) of this chapter; and (ii) executed a qualified escrow agreement that conforms to the requirements in Article 1 of this chapter;

3. That such nonparticipating manufacturer is in full compliance with Article 1 (§ 3.2-4200 et seq.) of this chapter and this article, and any regulations promulgated pursuant thereto;

4. The (i) name, address and telephone number of the financial institution where the nonparticipating manufacturer has established such qualified escrow fund required pursuant to Article 1 (§ 3.2-4200 et seq.) of this chapter; (ii) account number of such qualified escrow fund and subaccount number for the Commonwealth; (iii) amount such nonparticipating manufacturer placed in such fund for cigarettes sold in the Commonwealth during the preceding calendar year, the date or dates and amount of each such deposit, and verification of those dates and amounts of deposits as may be deemed necessary by the Attorney General; and (iv) amounts of and dates of any withdrawal or transfer of funds the nonparticipating manufacturer made at any time from such fund or from any other qualified escrow fund into which it has at any time made escrow payments pursuant to Article 1 of this chapter; and

5. In the case of a nonparticipating manufacturer located outside of the United States, that it has provided a declaration on a form prescribed by the Attorney General from each of its importers into the United States of any of its brand families to be sold in Virginia that such importer accepts joint and several liability with the nonparticipating manufacturer for all escrow deposits due in accordance with § 3.2-4201, for all penalties assessed in accordance with § 3.2-4201, and for payment of all costs and attorney fees imposed in accordance with this article. Such declaration shall appoint for the declarant a resident agent for service of process in Virginia in accordance with subsection A of § 3.2-4208.

E. A tobacco product manufacturer may not include a brand family in its certification unless (i) in the case of a participating manufacturer, such participating manufacturer affirms that the brand family is to be deemed to be its cigarettes for purposes of calculating its payments under the Master Settlement Agreement for the relevant year, in the volume and shares determined pursuant to the Master Settlement Agreement; and (ii) in the case of a nonparticipating manufacturer, said nonparticipating manufacturer affirms that the brand family is to be deemed to be its cigarettes for purposes of Article 1 (§ 3.2-4200 et seq.) of this chapter. Nothing in this section shall be construed as limiting or otherwise affecting the Commonwealth's right to maintain that a brand family constitutes cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the Master Settlement Agreement or for purposes of Article 1 of this chapter.

F. The tobacco product manufacturers shall maintain all invoices and documentation of sales and other such information relied upon for such certification for a period of five years, unless otherwise required by law to maintain them for a greater period of time.

2003, c. 798, § 3.1-336.4; 2006, c. 31; 2008, cc. 758, 860.

§ 3.2-4206. Directory of cigarettes approved for stamping and sale.

A. Not later than October 1, 2003, the Attorney General shall develop and publish on its website a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of § 3.2-4205 and all brand families that are listed in such certifications (the Directory), except as noted below.

1. The Attorney General shall not include or retain in such Directory the name or brand families of (i) any participating manufacturer that fails to provide the required certification or to make a payment calculated by the independent auditor to be due from it under the Master Settlement Agreement except to the extent that it is disputing such payment, or (ii) any nonparticipating manufacturer that fails to provide the required certification or whose certification the Attorney General determines is not in compliance with subsections A through D of § 3.2-4205, unless the Attorney General has determined that such violation has been cured to his satisfaction.

2. Neither a tobacco product manufacturer nor brand family shall be included or retained in the Directory if the Attorney General concludes that (i) in the case of a nonparticipating manufacturer all escrow payments required pursuant to Article 1 (§ 3.2-4200 et seq.) of this chapter for any period for any brand family, whether or not listed by such nonparticipating manufacturer, have not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the Attorney General, (ii) any outstanding final judgments, including interest thereon, for violations of Article 1 of this chapter have not been fully satisfied for such brand family and such manufacturer, (iii) in the case of a nonparticipating manufacturer or a tobacco product manufacturer that became a participating manufacturer after the Master Settlement Agreement execution date, as defined by section II (aa) of the Master Settlement Agreement, by reason of the business plan, business history, trade connections, or compliance and payment history under the Master Settlement Agreement or in Virginia or any other state, or the business history, trade connections or compliance and payment history under the Master Settlement Agreement or in Virginia or any other state of any of the principals thereof, the nonparticipating manufacturer or such tobacco product manufacturer fails to provide reasonable assurance that it will comply with the requirements of this article or of Article 1 (§ 3.2-4200 et seq.) of this chapter, or (iv) the manufacturer has knowingly failed to disclose any material information required or knowingly made any material false statement in the certification of any supporting information or documentation provided.

As used in this subdivision, reasonable assurances may include information and documentation establishing to the satisfaction of the Attorney General that a failure to pay in Virginia or elsewhere was the result of a good faith dispute over the payment obligation.

B. The Attorney General shall update the Directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand families to keep the Directory in conformity with the requirements of this article.

C. Notwithstanding the provisions of subsection A, in the case of any nonparticipating manufacturer who has established a qualified escrow account pursuant to Article 1 (§ 3.2-4200 et seq.) of this chapter that has been approved by the Attorney General, or in the case of any participating manufacturer, the Attorney General may not remove such manufacturer or its brand families from the Directory unless the manufacturer has been given at least 30 days' notice of such intended action. For purposes of this section, notice shall be deemed sufficient if it is sent either electronically or by first-class mail to an electronic mail address or postal mailing address, as the case may be, provided by the manufacturer in its most recent certification filed pursuant to § 3.2-4205. The notified nonparticipating manufacturer shall have 30 days from receipt of the notice to either come into compliance with the applicable requirements or, in the alternative, secure a temporary injunction against removal from the Directory. For purposes of a temporary injunction sought pursuant to this subsection, loss of the ability to sell tobacco products as a result of removal from the Directory may be deemed to constitute irreparable harm.

D. Every stamping agent shall provide and update as necessary an electronic mail address to the Attorney General for the purpose of receiving any notifications as may be required by this article.

2003, c. 798, § 3.1-336.5; 2008, cc. 758, 860.

§ 3.2-4206.01. List of persons ineligible to be authorized holders.

A. The Attorney General shall develop and publish on its website a list of individuals who are ineligible to be authorized holders as defined in § 58.1-1000. The Attorney General shall update the list as necessary to add names of individuals who are no longer eligible to be authorized holders. Upon request, the Office of the Executive Secretary of the Supreme Court shall provide the Attorney General with assistance to ensure that the requirements of this section are met.

B. Any attorney for the Commonwealth, law-enforcement officer, or other person may submit a request to the Attorney General that a person be included on the list and shall submit a certified court order of the conviction that makes the person ineligible to be an authorized holder of cigarettes.

C. Nothing in this section shall impose an affirmative duty on the Attorney General to identify persons to be included on the list who are ineligible to be authorized holders of cigarettes due to a conviction in another state, in the absence of a request received from an attorney for the Commonwealth, law-enforcement officer, or other person.

D. No liability shall be imposed upon the Attorney General for any omissions or the incorrect inclusion of any individual on the listing required under subsection A. No liability shall be imposed upon any attorney for the Commonwealth or law-enforcement official who provides information to the Attorney General in accordance with subsection B. This provision shall not be construed to grant immunity for gross negligence or willful misconduct.

2015, cc. 738, 754.

§ 3.2-4206.1. Bond requirement for newly qualified and elevated-risk nonparticipating manufacturers.

A. Notwithstanding any other provision of law, if a newly qualified nonparticipating manufacturer is to be listed in the Virginia Tobacco Directory (the Directory), or if the Attorney General reasonably determines that any nonparticipating manufacturer who has filed a certification pursuant to § 3.2-4205 poses an elevated risk for noncompliance with this article or with Article 1 (§ 3.2-4200 et seq.), neither such nonparticipating manufacturer nor any of its brand families shall be included in the Directory unless and until such nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the manufacturer's performance in accordance with § 3.2-4208.1, has posted a bond in accordance with this section.

B. The bond shall be posted by corporate surety located within the United States in an amount equal to the greater of $50,000 or the amount of escrow the manufacturer in either its current or predecessor form was required to deposit as a result of its highest calendar year's sales in Virginia. The bond shall be written in favor of the Commonwealth of Virginia and shall be conditioned on the performance by the nonparticipating manufacturer, or its United States importer that undertakes joint and several liability for the manufacturer's performance in accordance with subsection A of § 3.2-4201, of all of its duties and obligations under this article and Article 1 (§ 3.2-4200 et seq.) during the year in which the certification is filed and the next succeeding calendar year.

C. A nonparticipating manufacturer may be deemed to pose an elevated risk for noncompliance with this article or Article 1 (§ 3.2-4200 et seq.) if:

1. The nonparticipating manufacturer or any affiliate thereof has underpaid an escrow obligation with respect to any state at any time during the calendar year or within the past three calendar years unless (i) the manufacturer did not make underpayment knowingly or recklessly and the manufacturer promptly cured the underpayment within 180 days of notice of it, or (ii) the underpayment or lack of payment is the subject of a good faith dispute as documented to the satisfaction of the Attorney General and the underpayment is cured within 180 days of entry of a final order establishing the amount of the required escrow payment;

2. Any state has removed the manufacturer or its brands or brand families or an affiliate or any of the affiliate's brands or brand families from the state's tobacco directory for noncompliance with the state law at any time during the calendar year or within the past three calendar years; or

3. Any state has litigation pending against, or an unsatisfied judgment against, the manufacturer or any affiliate thereof for escrow or for penalties, costs, or attorney fees related to noncompliance with state escrow laws.

D. As used in this section "newly qualified nonparticipating manufacturer" means a nonparticipating manufacturer that has not previously been listed in the Virginia Tobacco Directory. Such manufacturers may be required to post a bond in accordance with this section for the first three years of their listing, or longer if they have been determined to pose an elevated risk for noncompliance.

2008, c. 758, § 3.1-336.5:1; 2011, c. 297.

§ 3.2-4207. Prohibition against stamping or sale or import of cigarettes not in the Directory.

A. It shall be unlawful for any person (i) to affix a stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family not included in the Directory, or (ii) to sell, offer or possess for sale in the Commonwealth, ship or otherwise distribute into or within the Commonwealth, or import for personal consumption into the Commonwealth, cigarettes of a tobacco product manufacturer or brand family not included in the Directory. For purposes of this article a person shall be deemed to have received notice that cigarettes of a tobacco product manufacturer or brand family are not included in the Directory at the time the Attorney General's website fails to list any such cigarettes in the Directory or at the time any such cigarettes are removed from the Directory. A person purchasing cigarettes for resale shall not be in violation of this section (a) if at the time of such purchase the manufacturer and brand families of the cigarettes are included in the Directory and the cigarettes are otherwise lawfully stamped and sold within 45 days of the date such manufacturer and brand families were removed from the Directory or (b) if, in the case of a retailer, the cigarettes are sold or delivered to consumers within 45 days after receipt of delivery of such cigarettes from a wholesaler, which cigarettes otherwise have been lawfully purchased from the same wholesaler. A tobacco product manufacturer that is otherwise in compliance with the requirements of this chapter may, for reasons satisfactory to the Attorney General, request removal of itself, or cigarettes in a brand family that it manufactures or has manufactured, from the Directory. A person purchasing cigarettes for resale shall not be in violation of this section if (1) at the time of such purchase, the manufacturer and brand families of the cigarettes are included in the Directory and the cigarettes are otherwise lawfully stamped and sold within 60 days of the date such cigarettes were removed from the Directory or (2) in the case of a retailer, the cigarettes are sold or delivered to consumers within 60 days after receipt of delivery of such cigarettes from a wholesaler and the cigarettes have been lawfully purchased from the same wholesaler. The updates to the Directory required by subsection B of § 3.2-4206 shall contain a notation indicating such voluntary removal. For purposes of this subsection, "reasons satisfactory to the Attorney General" shall include cessation of the business operations of the tobacco products manufacturer and voluntary discontinuance of a product line or brand family.

B. Any manufacturer, wholesaler or retail dealer selling cigarettes for resale of a manufacturer or brand family that has been removed from the Directory shall notify the purchaser of such cigarettes of that fact at the time of delivery of such cigarettes. Unless otherwise provided by contract or purchase agreement, a purchaser shall receive a refund from such manufacturer, wholesaler or retail dealer from whom the cigarettes were purchased of the purchase price of any cigarettes that are the product of a manufacturer or brand family removed from the Directory. Any failure of such manufacturer, wholesaler or retail dealer to provide the purchaser with the refund required under this subsection shall (i) create a cause of action against such manufacturer, wholesaler or retail dealer in favor of the purchaser and (ii) subject such manufacturer, wholesaler or retail dealer to a civil penalty of $500 for each violation, which shall be assessed by the Commissioner and payable to the Literary Fund.

C. The Commissioner shall, by regulation or guidelines, provide for the refund of the purchase price of tax stamps that have been lawfully affixed to cigarettes that may not be sold pursuant to the provisions of this section.

2003, c. 798, § 3.1-336.6; 2008, c. 860; 2011, c. 846.

§ 3.2-4208. Agent for service of process.

A. Any nonresident or foreign nonparticipating manufacturer that has not registered to do business in the Commonwealth as a foreign corporation or business entity shall, as a condition precedent to having its brand families listed or retained in the Directory, appoint and continually engage without interruption the services of an agent in the Commonwealth to act as agent for the service of process on whom all process, and any action or proceeding against it concerning or arising out of the enforcement of this article or Article 1 (§ 3.2-4200 et seq.) of this chapter may be served in any manner authorized by law. Such service shall constitute legal and valid service of process on the nonparticipating manufacturer. The nonparticipating manufacturer shall provide the name, address, phone number and proof of the appointment and availability of such agent to the satisfaction of the Commissioner and Attorney General. Any nonparticipating manufacturer located outside of the United States shall, as an additional condition precedent to having its brand families listed or retained in the Directory, cause each of its importers into the United States of any of its brand families to be sold in Virginia to appoint and continually engage without interruption the services of an agent in the Commonwealth in accordance with the provisions of this section. All obligations of a nonparticipating manufacturer imposed by this section with respect to appointment of its agent shall likewise apply to such importers with respect to appointment of their agents.

B. The nonparticipating manufacturer shall provide notice to the Commissioner and Attorney General 30 calendar days prior to termination of the authority of an agent and shall further provide proof to the satisfaction of the Attorney General of the appointment of a new agent no less than five calendar days prior to the termination of an existing agency appointment. In the event an agent terminates an agency appointment, the nonparticipating manufacturer shall notify the Commissioner and Attorney General of said termination within five calendar days and shall include proof to the satisfaction of the Attorney General of the appointment of a new agent.

C. Any nonparticipating manufacturer whose products are sold in this state, without appointing or designating an agent as herein required, shall be deemed to have appointed the Secretary of the Commonwealth as such agent and may be proceeded against in courts of the Commonwealth by service of process upon the Secretary of the Commonwealth. The appointment of the Secretary of the Commonwealth as such agent shall not satisfy the condition precedent to having its brand families listed or retained in the Directory.

2003, c. 798, § 3.1-336.7; 2008, cc. 758, 860.

§ 3.2-4208.1. Joint and several liability.

For each nonparticipating manufacturer located outside the United States, each importer into the United States of any such nonparticipating manufacturer's brand families that are sold in Virginia shall bear joint and several liability with such nonparticipating manufacturer for deposit of all escrow due under § 3.2-4201, payment of all penalties imposed in accordance with § 3.2-4201, and payment of all costs and attorney fees imposed in accordance with this article.

2008, c. 758, § 3.1-336.7:1.

§ 3.2-4209. Reporting of information.

A. Not later than 20 days after the end of each calendar quarter, and more frequently if so directed by the Commissioner, each stamping agent shall submit to the Attorney General such information as the Attorney General requires to facilitate compliance with this article, including, but not limited to, a list by brand family of the total number of cigarettes for which the stamping agent affixed stamps during the previous calendar quarter or otherwise paid the tax due for such cigarettes. The Attorney General may allow such information to be filed electronically. For roll-your-own tobacco, in lieu of the number of cigarettes sold, the Attorney General shall require that the stamping agent submit the total quantity in ounces, by brand family, of all such roll-your-own tobacco in accordance with the invoice accompanying each shipment he initiates, as provided in subsection D of § 58.1-1003.2, or for which the stamping agent otherwise paid the tax due for such roll-your-own tobacco. The stamping agent shall maintain, and make available to the Commissioner and Attorney General, all invoices and documentation of sales of all nonparticipating manufacturer cigarettes and any other information relied upon in reporting to the Attorney General for a period of five years.

B. In addition to the information required to be submitted pursuant to subsection A or any other provision of law, the Attorney General may require a stamping agent, distributor or tobacco product manufacturer to submit any additional information including, but not limited to, samples of the packaging or labeling of each brand family, as is necessary to enable the Attorney General to determine whether a tobacco product manufacturer has complied, is in compliance, and will continue in compliance with this article and Article 1 (§ 3.2-4200 et seq.) of this chapter.

C. On a quarterly basis, and upon request made in writing by a tobacco product manufacturer, a stamping agent shall provide to the requesting tobacco product manufacturer the total number of cigarettes, by brand family, which the stamping agent reported to the Attorney General pursuant to subsection A, provided that such information provided by the stamping agent to a tobacco manufacturer shall be limited to the brand families of that manufacturer as listed in the Directory established pursuant to § 3.2-4206. A stamping agent receiving a request pursuant to this subsection shall provide the requested information within 30 days from receipt of the request.

2003, c. 798, § 3.1-336.8; 2006, cc. 31, 674, 768; 2008, cc. 758, 860; 2013, c. 381.

§ 3.2-4209.1. Additional information required.

A. When used in this section, the term "applicable returns" means the following returns or reports relating to cigarettes that are filed or required to be filed with the Alcohol and Tobacco Tax and Trade Bureau, United States Department of Treasury, after the effective date of this section; Alcohol and Tobacco Tax and Trade Bureau Form 5000.24, Alcohol and Tobacco Tax and Trade Bureau Form 5210.5 and Alcohol and Tobacco Tax and Trade Bureau Form 5220.6 as well as any successor returns or reports intended to replace Forms 5000.24, 5210.5, or 5220.6.

B. As a condition of selling cigarettes in the Commonwealth, every tobacco product manufacturer, as defined in § 3.2-4200, whose cigarettes are to be sold in the Commonwealth whether directly or through a distributor, importer, retailer, or similar intermediary or intermediaries shall, at the election of such tobacco product manufacturer, either:

(1) submit to the Attorney General a true and correct copy of each and every applicable return of such tobacco product manufacturer; or

(2) submit to the United States Treasury a request or consent under Internal Revenue Code section 6103 (c) authorizing the Alcohol and Tobacco Tax and Trade Bureau to disclose the applicable returns of such manufacturer to the Attorney General.

A foreign tobacco product manufacturer whose cigarettes are imported into the United States by an importer or importers shall submit, or shall cause each of its importers to submit, to the Attorney General each and every applicable return that includes any information about cigarettes of that foreign tobacco product manufacturer imported into the United States.

The Attorney General shall not disclose any applicable returns or any information contained therein, except as provided in subsection C, notwithstanding any statute of this state that otherwise authorizes or requires the disclosure of information by the Attorney General.

C. The Attorney General's Office shall compile data on cigarette shipments from the applicable returns and shall share such data with other states that are signatories to the Master Settlement Agreement, as defined in § 3.2-4200, provided that such states impose protections against disclosure of the applicable returns, or any information from applicable returns, that are equivalent to the protections provided under subsection B. No other disclosures of the applicable returns, or of information from the applicable returns, may be made by the Attorney General.

D. A tobacco product manufacturer who does not comply with the requirements of subsection B shall, after 30 days' notice by the Commonwealth to such tobacco product manufacturer of the compliance failure, lose its authority to sell cigarettes in the Commonwealth unless such tobacco product manufacturer has brought itself into compliance by the end of the 30-day period.

E. Any tobacco manufacturer or importer who intentionally provides any applicable return containing materially false information shall be guilty of a Class 6 felony. The provision of each applicable return containing one or more false statements shall constitute a separate offense.

F. The Attorney General may promulgate regulations to implement and carry out the provisions of this section.

2008, c. 176, § 3.1-336.8:1.

§ 3.2-4210. Escrow fund information.

The Attorney General at any time may require a nonparticipating manufacturer to provide proof from the financial institution in which such manufacturer has established a qualified escrow fund for the purpose of compliance with Article 1 (§ 3.2-4200 et seq.) of this chapter of the amount of money in and the dates of deposits to such fund being held on behalf of the Commonwealth and listing the amounts and dates of all withdrawals from such fund.

2003, c. 798, § 3.1-336.9; 2008, c. 860.

§ 3.2-4211. Quarterly escrow payments by certain nonparticipating manufacturers.

A. Notwithstanding the provisions of § 3.2-4201, on and after January 1, 2007, the Attorney General may require a nonparticipating manufacturer that is a new market entrant or that has been designated by the Attorney General as an elevated risk pursuant to subsection C of § 3.2-4206.1 to make the escrow payments required by § 3.2-4201 on a quarterly, rather than annual basis. For the purposes of this section, a "new market entrant" shall mean a tobacco product manufacturer that first seeks certification pursuant to § 3.2-4205 on or after January 1, 2007.

B. A nonparticipating manufacturer required to make quarterly payments pursuant to this section shall place into a qualified escrow account the amounts required pursuant to subdivision A 2 of § 3.2-4201 by the fifteenth of the second month following the end of each calendar quarter, except the payment for the last quarter of a calendar year shall be made by April 15 of the year following the year in question. Any adjustments for inflation to the amounts placed into a qualified escrow pursuant to this section shall be reflected in the payments for the last quarter of a calendar year.

C. A nonparticipating manufacturer required to make payments pursuant to this section shall also provide the certification required by subsection C of § 3.2-4201 on a quarterly basis. Any such nonparticipating manufacturer that fails in any quarter to place into escrow the funds required under this section shall be subject to the penalty provisions of § 3.2-4201.

D. The Attorney General is authorized to create any forms and require any nonparticipating manufacturer required to make quarterly payments pursuant to this section to submit any additional information as is necessary to enable the Attorney General to determine whether the nonparticipating manufacturer is in compliance with the provisions of this section. At the time the nonparticipating manufacturer is first certified by the Attorney General pursuant to § 3.2-4205 or at any time that the nonparticipating manufacturer is designated by the Attorney General as an elevated risk pursuant to subsection C of § 3.2-4206.1, the Attorney General will notify the nonparticipating manufacturer as to whether it will be required to make quarterly payments pursuant to this section. The Attorney General may seek an injunction to compel compliance with the reporting requirements. In any action brought pursuant to this subsection in which the Commonwealth prevails, the Commonwealth shall be entitled to recover the reasonable costs of investigation, costs of the action, and reasonable attorney fees.

E. A nonparticipating manufacturer required to make quarterly payments pursuant to this section who fails to properly do so shall be deemed to have failed to make required payments pursuant to § 3.2-4201 and shall be subject to all enforcement actions available for a violation of § 3.2-4201.

F. A nonparticipating manufacturer required to make quarterly payments pursuant to this section who, to the satisfaction of the Attorney General, has complied with the provisions of Article 1 (§ 3.2-4200 et seq.) of this chapter and the provisions of this article for a period of at least three calendar years may, upon request and upon the concurrence of the Attorney General, be permitted to make annual payments pursuant to Article 1 (§ 3.2-4200 et seq.) of this chapter and be relieved of further obligation to make quarterly payments.

2006, c. 674, § 3.1-336.9:1; 2008, c. 860; 2011, c. 297.

§ 3.2-4212. Penalties and other remedies.

A. In addition to any other civil or criminal penalty or remedy provided by law, upon a determination that any person has violated § 3.2-4207 or any regulation adopted pursuant thereto, the Commissioner may revoke or suspend such person's privilege to purchase tax stamps at a discounted rate. Each stamp affixed and each offer to sell cigarettes in violation of § 3.2-4207 shall constitute a separate violation. Upon a determination of a violation of § 3.2-4207 or any regulations adopted pursuant thereto, the Commissioner may also impose a civil penalty in an amount not to exceed the greater of (i) 500 percent of the retail value of the cigarettes sold or (ii) $5,000.

B. Any cigarettes that have been sold, offered for sale or possessed for sale in the Commonwealth, or imported for personal consumption in the Commonwealth, in violation of § 3.2-4207, shall be deemed contraband and may not be sold or offered for sale unless such cigarettes are listed in the Directory. Any such cigarettes that are sold or offered for sale when not included in the Directory shall be subject to confiscation and forfeiture. Any such confiscation and forfeiture shall be governed by the procedures contained in Chapter 22.1 (§ 19.2-386.1 et seq.) of Title 19.2, which shall apply mutatis mutandis; except that all such cigarettes so confiscated and forfeited shall be destroyed and not resold.

C. The Attorney General may seek an injunction to restrain a threatened or actual violation of § 3.2-4207, subsection A of § 3.2-4209, subsection B of § 3.2-4209, or subsection C of § 3.2-4209 by a stamping agent and to compel the stamping agent to comply with such provisions. In any action brought pursuant to this subsection in which the Commonwealth prevails, the Commonwealth shall be entitled to recover the reasonable costs of investigation, costs of the action and reasonable attorney fees.

D. It shall be unlawful for a person to (i) sell or distribute cigarettes or (ii) acquire, hold, own, possess, transport, import, or cause to be imported cigarettes that the person knows or should know are intended for distribution or sale in the Commonwealth in violation of § 3.2-4207. A violation of this section involving less than 3,000 packages of cigarettes is a Class 1 misdemeanor. A violation of this section involving 3,000 or more packages of cigarettes is a Class 1 misdemeanor, and, upon conviction, the sentence of such person shall include a mandatory minimum term of confinement of 90 days.

2003, c. 798, § 3.1-336.10; 2006, c. 674; 2008, cc. 758, 860; 2009, c. 847; 2012, cc. 283, 756.

§ 3.2-4213. Notice and review of determination.

A determination of the Attorney General to not list or to remove from the Directory a brand family or tobacco product manufacturer shall be subject to review in the manner prescribed by the Administrative Process Act (§ 2.2-4000 et seq.).

2003, c. 798, § 3.1-336.11; 2008, c. 860.

§ 3.2-4214. Promulgation of regulations.

The Commissioner may promulgate regulations necessary to assist him in performing his duties prescribed by this article.

2003, c. 798, § 3.1-336.12; 2008, c. 860.

§ 3.2-4215. Submission to jurisdiction of the Commonwealth; pleadings in English sufficient.

A. Any tobacco product manufacturer that produces cigarettes sold or offered for sale into or within the Commonwealth shall be deemed to have submitted to and agreed to the jurisdiction of the courts of the Commonwealth for the purpose of trying any action brought by the Commonwealth to enforce provisions of this article or Article 1 (§ 3.2-4200 et seq.) of this chapter.

B. In any action brought by the Commonwealth to enforce the provisions of this article or Article 1 (§ 3.2-4200 et seq.) of this chapter, sufficient notice of the action to the alleged violator shall be given by a complaint written in the English language. The Commonwealth shall not be required to bear any expense of translating such complaint into another language.

2003, c. 798, § 3.1-336.13; 2008, c. 860.

§ 3.2-4215.1. Authority of Attorney General; audit and investigation.

The Attorney General or his authorized representative shall have the authority to:

1. Conduct audits and investigations of (i) a nonparticipating manufacturer and its importers or a tobacco product manufacturer as defined in § 3.2-4200 that became a participating manufacturer after the Master Settlement execution date, as defined at section II (aa) of the Master Settlement Agreement, and its importers, (ii) exclusive distributors, retail dealers, stamping agents, and wholesale dealers, as defined in § 58.1-1000, and (iii) persons or entities engaged in delivery sales as defined in § 18.2-246.6; and

2. Upon reasonable cause to believe that a violation of this article or of Article 1 (§ 3.2-4200 et seq.) of this chapter, or of Chapter 10 (§ 58.1-1000 et seq.) of Title 58.1, or Article 10 (§ 18.2-246.6 et seq.) of Chapter 6 of Title 18.2 has occurred or is reasonably likely to occur, issue subpoenas, compel the attendance of witnesses, administer oaths, certify to official acts, take depositions within and without the Commonwealth, as now provided by law, and compel the production of pertinent books, payrolls, accounts, papers, records, documents, and testimony relevant to such investigation. If a person refuses, without good cause, to be examined or to answer a legal and pertinent question, or to produce a document or other evidence when ordered to do so by the Attorney General or his authorized representative, the Attorney General or his authorized representative may apply to the judge of the circuit court of the jurisdiction where such person is in attendance or located, upon affidavit, for an order returnable in no less than two nor more than five days, directing such person to show cause why he should not be examined, answer a legal or pertinent question or produce a document, record or other evidence. Upon the hearing of such, if the court determines that such person, without good cause, has refused to be examined or to answer legal or pertinent questions, or to produce a document, record or other evidence, the court may order compliance with the subpoena and assess all costs and reasonable attorney fees against such person. If the motion for an order is granted and the person thereafter fails to comply with the order, the court may make such orders as are provided for in the Rules of the Supreme Court of Virginia. Subpoenas shall be served and witness fees and mileage paid as allowed in civil cases in the circuit courts of the Commonwealth.

2008, c. 758, § 3.1-336.13:1.

§ 3.2-4216. Recovery of costs and fees by Attorney General.

In any action brought by the Commonwealth to enforce this article or Article 1 (§ 3.2-4200 et seq.) of this chapter in which the Commonwealth prevails, or as part of the settlement of any matter arising from an investigation prior to the filing of such action, and in addition to any civil or criminal penalty or other amount which the court may determine, the Attorney General shall be entitled to recover the reasonable costs of investigation, expert witness fees, costs of the action and reasonable attorneys' fees.

2003, c. 798, § 3.1-336.14; 2008, c. 860.

§ 3.2-4217. Disgorgement of profits for violations.

If a court determines that a person has violated this article, the court shall order any profits, gain, gross receipts or other benefit from the violation to be disgorged and paid to the Treasurer of the Commonwealth. Unless otherwise expressly provided, the remedies or penalties provided by this article are cumulative to each other and to the remedies or penalties available under all other laws of the Commonwealth.

2003, c. 798, § 3.1-336.15; 2008, c. 860.

§ 3.2-4217.1. Presumption.

In any action under subsection C of § 3.2-4201, reports of numbers of cigarettes stamped submitted to the Attorney General pursuant to subsection A of § 3.2-4209 shall be admissible in evidence and shall be presumed to accurately state the number of cigarettes stamped during the time period by the stamping agent that submitted the report absent a contrary showing by the nonparticipating manufacturer or importer. Nothing in this section shall be construed as limiting or otherwise affecting the Commonwealth's right to maintain that such reports are incorrect or do not accurately reflect a nonparticipating manufacturer's sales in the Commonwealth during the time period in question, and the presumption shall not apply in the event the Commonwealth does so maintain.

2008, c. 758, § 3.1-336.15:1.

§ 3.2-4218. Conflicts.

If an appropriate court finds that the provisions of this article and of Article 1 (§ 3.2-4200 et seq.) of this chapter conflict and cannot be harmonized, then the provisions of Article 1 shall control. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this article causes Article 1 to no longer constitute a qualifying or model statute, as those terms are defined in the Master Settlement Agreement, then that portion of this article shall not be valid.

2003, c. 798, § 3.1-336.16; 2008, c. 860; 2015, c. 709.

§ 3.2-4219. Materially false statements.

Any tobacco product manufacturer, stamping agent, or importer of cigarettes, or any officer, employee, or agent of any such entity, who knowingly and with the intent to defraud, mislead, or deceive makes any materially false statement in any record required by this chapter to be kept, or in any document required by this chapter to be filed with the Attorney General is guilty of a violation of § 18.2-498.3. Each document filed containing one or more false statements shall constitute a separate offense.

2009, c. 847.

The chapters of the acts of assembly referenced in the historical citation at the end of these sections may not constitute a comprehensive list of such chapters and may exclude chapters whose provisions have expired.

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