US lawmakers launch investigation into illegal e-cigarettes, sending letters of inquiry to five Chinese manufacturers and six US distributors

US lawmakers launch investigation into illegal e-cigarettes, sending letters of inquiry to five Chinese manufacturers and six US distributors

US Congressman Raja Krishnamurthy announced the launch of an investigation into illegal e-cigarettes and sent letters of inquiry to five Chinese manufacturers and six US wholesalers and distributors, requiring the companies to provide detailed trade information, product information, and compliance procedures. This action is aimed at combating the harm of illegal e-cigarettes to teenagers.
Disclaimer:

[1] This article only discusses e-cigarette regulation and business issues, and all content is only for readers in the global new tobacco industry.

[2] This article does not involve analysis and commentary on any political or diplomatic issues. All content in this article shall not be quoted for political or diplomatic purposes.

[3] The remarks and opinions of the relevant persons involved in this article are only for objective information transmission and do not represent the views of 2Firsts. In this article, 2Firsts does not comment on the views of relevant persons in other fields.

[4] The Chinese translation of the English materials quoted from the US Congress is for reference only. All content should be based on the original English text.

On December 4, U.S. House of Representatives member Raja Krishnamoorthi announced the official launch of an investigation into illegal e-cigarette imports and sent investigation letters to five Chinese manufacturers and six U.S. wholesalers and distributors.

The Chinese manufacturers under investigation were asked to provide a series of data and information, including global revenue in the past three years, sales data to the United States, shareholder information, taxes paid to the government and subsidies received, customs agents, distributors, retailer information, product details, and safety research. The investigation letter to Chinese manufacturers was also copied to the Director of the U.S. Food and Drug Administration (FDA), the Acting Director of the U.S. Customs and Border Protection (CBP), and the Secretary of the Department of Justice (DOJ).

U.S. wholesalers and distributors were asked to provide a list of agents selling Chinese-made e-cigarettes, revenue data, records of compliance communications with Chinese e-cigarette manufacturers in the past three years, and compliance procedures. At the same time, these U.S. wholesalers and distributors were also asked to explain why there were unauthorized product sales.

In a press release from the U.S. Congress, the above action was explained as being part of Congressman Raja Krishnamurthy's "larger campaign to end all forms of youth vaping." (This inquiry is part of the Ranking Member's larger campaign to end all forms of youth vaping.)

This is not the first action by Congressman Raja Krishnamurthy. In early December, Congressman Raja Krishnamurthy publicly expressed: "The endless supply of fruity, bright vapes found in so many store fronts are illegal. That is shocking and unacceptable, and the FDA must immediately use their authority to pull all illegal products from the shelves. I know that youth vaping is a public health crisis, and the actions of companies addicting our kids with flavors and impossibly high levels of nicotine are endangering their health and their lives."

Congressman Raja Krishnamurthy announced in an interview with the media that he would take action against illegal e-cigarettes | Source: NBCChicago

Earlier on April 10, 2024, Congressman Raja Krishnamurthy and Congressman Celeste Maloy led a letter to the Department of Justice urging increased law enforcement to prosecute illegal flavored e-cigarette products that are not authorized by the U.S. Food and Drug Administration (FDA), while requesting an update on the scale of e-cigarette law enforcement activities. At the same time, the Department of Justice was asked to provide a number of law enforcement information, such as the number of prosecutions for e-cigarettes, how to collaborate with the FDA, and whether there are dedicated agencies to combat illegal e-cigarette crimes.

In addition, Congressman Krishnamurthy played a key role in the 2019 investigation into JUUL's illegal marketing to minors.

5 Chinese e-cigarette manufacturers investigated

In this action, MP Krishnamurthy sent investigation letters to the following 5 Chinese manufacturers. The following are the names and brands of the companies mentioned (the Chinese names are translated by 2Firsts, for reference only)

1. Guangdong Qisitech Co. Ltd: Guangdong Qisi Intelligent Manufacturing Co. Ltd (Geek Bar, Raz)

2. Shenzhen HanQingDa Technology Co. Ltd: Shenzhen Hanqingda Technology Co. Ltd (HQD Cuvie)

3. iMiracle Technology Co. Ltd: Shenzhen Ai Miracle Technology Co. Ltd (Elf Bar, EB Design, Lost Mary)

4. BFL Metal Production Ltd: Foshan Liangfengming Metal Products Co. Ltd (Fume)

5. Dongguan Delin Technology Co. Ltd: Dongguan Delin Technology Co. Ltd (Juicy Bar)

The above five Chinese manufacturers are required to respond to the following questions by January 1, 2025 (the bold part before the question is marked by 2Firsts, just for the convenience of reading. Please refer to the original text):

1. Revenue details: Please describe the global revenue in 2022, 2023 and up to 2024, and indicate how much of the revenue is directly or indirectly related to exports to the United States.

2. Shareholder Information: List all shareholders holding more than 1% of the company's shares and their shareholding percentages.

3. Tax Payments: Provide specific amounts paid to the following entities in 2022, 2023, and the period ending in 2024:

(1) The U.S. government (including taxes, import fees, etc.);

(2) The Chinese government and its agencies (including taxes and fees paid to China Tobacco Corporation).

4. Government Support: Describe any subsidies, grants, or other support received from the Chinese government.

5. Legal Compliance: Describe specific measures taken to comply with U.S. laws and regulations related to ENDS products.

6. Transportation and Labeling: Describe the labeling of products shipped to the United States and provide a list of all goods and customs codes.

7. Distribution Network: List all customs brokers and distributors used to import and sell products.

8. Retailer List: List all retailers supplying in the United States.

9. Safety Research: Describe any research conducted on product safety, including its effects on minors under the age of 18.

10. Product List: Provide a complete list of all brands and products produced, including flavors and nicotine content.

Questions asked to be answered by 5 Chinese manufacturers | Source: Official website of the House of Representatives

6 US e-cigarette wholesalers and distributors investigated

6 US e-cigarette wholesalers and distributors also received investigation letters, including:

1. Midwest Goods
2. Kanger Wholesale
3. Vape Wholesale USA
4. Demand Vape
5. World Vape USA
6. Mi-Pod

The above companies were asked to respond to the following questions by January 1, 2025:

1. Distribution compliance: Are any Chinese-made tobacco products (including ENDS products) that are not authorized by the FDA currently distributed or sold? If not, please explain why these products appear on the website.

2. Review process: Please describe the specific process to ensure that the products sold are authorized by the FDA.

3. Communication records: Please provide copies of all correspondence with any Chinese company regarding whether ENDS products comply with US laws or regulations since January 1, 2022. If there is no such letter, please specify.

4. Removal of Illegal Products: Please describe the process for removing unauthorized FDA products (including products manufactured in China) from distribution channels.

5. Product List: Please provide a complete list of all Chinese brands and their products distributed, noting the flavors (including flavors that appeal to minors under 18) and nicotine content of these products.

6. Shipping Description: Please describe how ENDS products received from China are described on shipping labels or manifests.

7. Revenue Details: Please describe revenue for 2022, 2023, and through 2024, and detail the amount of revenue received each year from the distribution of unauthorized FDA-manufactured ENDS products manufactured in China.

Questions that six US distributors were asked to answer | Source: Official website of the House of Representatives

Editor's note:

In Krishnamurthy's statement and the investigation letter sent to Chinese e-cigarette manufacturers, the following statements appeared many times:

"The vast majority of illegal e-cigarettes and e-cigarettes in the United States are manufactured in the People's Republic of China."

"In 2022, the People's Republic of China banned the sale of flavored e-cigarettes in China. However, the People's Republic of China also did not prohibit the export of these dangerous products to the United States or other jurisdictions."

As an institution that has long studied and reported on global new tobacco regulatory policies, industrial economics and market development, 2Firsts makes the following explanations:

(1) China is the center of the global e-cigarette supply chain. This is the result of the global industrial division of labor, and it follows the market economy and international trade rules.

(2) The illegal behavior of some Chinese manufacturers should not be used to generalize the entire "Made in China". In fact, most compliant e-cigarette brands, including international tobacco companies, are also manufactured in China.

(3) China's e-cigarette regulatory policy prohibits the sale of flavored e-cigarettes in China. As for the international market, considering that the regulatory policies and product standards of various countries are not unified (in fact, flavored e-cigarettes are not illegal in many countries at present), Chinese regulators cannot require the international market to adopt the same regulatory policies and product standards as China. However, China's e-cigarette regulatory laws also clearly require companies to comply with the laws of the destination country.

(4) The illegal trade of e-cigarettes is a global problem. Since illegal trade often uses complex illegal trading chains and entities, the supervision of illegal trade requires the joint cooperation of international regulators. As 2Firsts CEO Alan Zhao emphasized in his speech at the 2024GFN (Global Nicotine Forum), regulators from various countries should strengthen cooperation and establish a global regulatory cooperation mechanism for illegal e-cigarettes.