Kretek - Legal Status in The United States

Legal Status in The United States

In the United States, cigarettes were the subject of legal restrictions and political debate, including a proposed 2009 US Senate bill that would have prohibited cigarettes from having a "characterizing flavor" of certain ingredients other than tobacco and menthol.

A study by the U.S. Centers for Disease Control found kreteks account for a relatively small percentage of underage smoking, and their use was declining among high school students. Critics of the bill argued that support of the bill by the large U.S. tobacco maker Philip Morris, which makes only conventional and menthol cigarettes, indicated that the bill was an attempt to protect the company from competition.

Some U.S. states, including Utah, New Mexico, and Maryland, passed laws that prohibit the sale of kreteks. On 14 March 2005, Philip Morris International announced the purchase of Indonesian tobacco company PT HM Sampoerna after acquiring a 40% stake in Sampoerna from a number of Sampoerna’s principal shareholders.

In 2009, the Family Smoking Prevention and Tobacco Control Act was introduced in the US Congress and signed into law by President Barack Obama, giving the FDA significantly more regulatory power over tobacco; one of the provisions in the law includes a ban on the use of flavors in tobacco, other than menthol. The ban includes kreteks. As of September 22, 2009 the clove cigarette was no longer legal to sell or distribute in the US, and cigarettes purchased overseas are subject to seizure by U.S. Customs. There is an exception to this rule when receiving cigarettes as gifts through the USPS and is only allowed if certain guidelines are followed. This rule does not allow for purchase of tobacco products overseas but allows the receipt of gifts from domestic individuals and international individuals. However, Kretek International Inc., importer of the Djarum brand continued to offer the clove / tobacco products as little cigars, which have lower taxes (in some U.S. states) and looser restrictions than cigarettes.

On April 12, 2010 Indonesia filed a formal complaint with the World Trade Organization stating the ban on kreteks in America amounts to discrimination because menthol cigarettes are exempt from the new regulation. Trade Ministry Director General of International Trade Gusmardi Bustami has stated that the Indonesian government has asked the WTO panel to review US violations on trade regulations, including the General Agreement on Tariff and Trade (GATT) 1994, Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) Agreement. The TBT Agreement is of special importance as it defines clove cigarettes and menthol cigarettes as "like products". Claims of discrimination are enhanced when noting that 99% of kreteks were imported from countries other than the United States (chiefly Indonesia), while menthol cigarettes are produced almost entirely by American tobacco manufacturers. Indonesia's case is further strengthened by comparing the number of young kretek smokers in America with the number of young menthol cigarette smokers. According to US health reports, 43% of young smokers smoke menthol cigarettes, which accounts for nearly 25% of the total cigarette consumption in the United States. Young smokers habituated to Kreteks, however, account for less than 1% of cigarette consumption in the US, and <1% of the total cigarettes sold in the US. On April 4, 2012 the WTO ruled in favor of Indonesia's claim, though it is unclear how this will affect U.S. law.