Counterfeit Cigars—South Florida

Perhaps one of the world’s most famous “brands” is the Cuban cigar. It was the subject of at least two Seinfeld episodes,^[1] it has been featured in movies and books for decades, and it is legally available in almost every country except the United States. The allure of Cuban cigars is enhanced by their forbidden mystique, and as the Seventh Circuit Court of Appeals’ Judge Evans notes, while the quality of Cuban cigars may have dropped off in recent years, “it is undisputed that the leaves grown in the fertile soil of the Vuelta Abajo, in the western province of Pinar del Rio, cultivated and prepared according to centuries-old traditions, produce an incomparably smooth, pungent, and full-bodied smoke.”^[2]

Cuban cigars cannot legally be imported into the United States under a host of law. Under 18 U.S.C. § 545, it is illegal to fraudulently or knowingly import into the United States any merchandise contrary to law. Violating this law can result in a fine, imprisonment for up to 5 years or both. Under the Trading With the Enemy Act of 1917,^[3] the President has the authority to prohibit transactions with countries with which the United States is at war; violating those prohibitions can result in up to $1,000,000 in fines, up to years in prison, or both. Trade with Cuba is prohibited by the Cuban Assets Control Regulations,^[4] which went into effect at 12:01 AM, EST, July 8, 1963.^[5]

This hasn’t stopped the demand for Cuban cigars, nor has it prevented people from taking their own steps to cash in on the Cuban cigar mystique. In Southern Florida, street vendors hawk cigars purporting to be from Cuba, bearing authentic-looking labels from brands such as Montecristo, Romeo y Julieta, Cohiba and more.^[6] While these counterfeit cigars do not violate the embargo on Cuban products, they do violate other laws, and the US-based companies—such as Fort Lauderdale-based Altadis USA, who sells real Cuban cigars in other countries—are working with local and federal law enforcement authorities to go after those who create and sell the knock-offs.^[7] In December, for example, “it worked with Miami-Dade police in nabbing eight people, seizing truckloads of cigar boxes, labels and other paraphernalia for counterfeiting”; those state charges turned into federal trafficking in counterfeit goods charges last month.^[8]

On March 16, President Bush signed the “Stop Counterfeiting in Manufactured Goods Act”^[9] into law.^[10] This act amends 18 U.S.C. § 2320 in a couple of ways. Whereas the previous version of the law only made it a crime to traffic in goods and “knowingly use[] a counterfeit mark on or in connection with such goods or services,” the new version expands the range of prohibited activity to include the intentional trafficking in “labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature to which a counterfeit mark is knowingly applied.”^[11] In other words, the labels themselves, such as the Montecristo logo, are illegal, even if they are not yet affixed to the counterfeit cigars.

While South Floridian shop-owners may feel that complaints to local authorities “have not helped,”^[12] it is clear that the government is stepping up efforts to crack down on the practice.

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[1] See, The English Patient, tv.com, last visited Apr. 10, 2006; The Cheever Letters, tv.com, last visited Apr. 10, 2006.
[2] United States v. Connors, No. 04-3478 (7th Cir. 2005) (citing James Suckling, On the Road to Tobacco Country, Cigar Aficionado, May/Jun. 2001).
[3] 50 U.S.C. Appx. §§ 5(b)(1) and 16
[4] 31 C.F.R. § 515.201(b).
[5] Id. § 515.201(d).
[6] Doreen Hemlock, Beware of Cigar Imposters, South Florida Sun-Sentinel, Apr. 9, 2006.
[7] Id.
[8] Id.
[9] 109 H.R. 32 [hereinafter SCMGA]
[10] See Susan Butler, Bush Closes Loopholes in Counterfeiting Law, Billboard.biz, Mar. 16, 2006.
[11] SCMGA, supra note 9, § 2(1).
[12] Hemlock, supra note 6.