P.R. Laws tit. 24, § 15002
Any tobacco products manufacturer selling cigarettes to consumers in Puerto Rico, whether directly or through a distributor, retailer, similar intermediary or other intermediaries, after the date of effectiveness of this act must take one of the following actions:
(a) Become a participating manufacturer and meet the financial obligations set forth in the Master Settlement Agreement, or
(b) Meet the following:
(1) Place into a qualified escrow fund by April 15 of the year following the year in question the following amounts (as such amounts are adjusted for inflation):
[for] 2000: $.0104712 per unit sold after the date of enactment of this act;
for each of 2001 and 2002: $.0136125 per unit sold;
for each of 2003 through 2006: $.0167539 per unit sold;
for each of 2007 and each year thereafter: $.0188482 per unit sold.
(2) A tobacco products manufacturer that deposits funds into an escrow pursuant to the provisions of clause (1) of this subsection shall receive the interest or any other benefit yielded by these funds. These funds may be withdrawn from escrow under the following circumstances only:
(A) To pay any judgment or settlement on any released claim brought against said tobacco products manufacturer by the Government of Puerto Rico or any other releasing party located or residing in Puerto Rico. These funds shall be withdrawn from escrow under this paragraph in the order these were required under said settlement or transactional agreement.
(B) To the extent a tobacco products manufacturer may establish that the amount he was required to place in escrow based upon the units sold in Puerto Rico during a specific year was greater than the payment of the Master Settlement Agreement, as determined under Section IX(i) of said Agreement, including the final determination of all the adjustments that said manufacturer had been required to make, according to the units sold, if said manufacturer had been a participating manufacturer.
(C) To the extent the funds deposited in escrow were not released, according to the provisions in paragraphs (A) or (B) above, they shall be released from escrow and returned to the tobacco products manufacturer twenty-five (25) years after the date these were placed into escrow.
It is hereby prohibited that tobacco products manufacturers who make deposits in escrow funds use, access or direct the use of the principal of said funds, with the exception of what is in agreement with this subsection.
(3) Each tobacco product manufacturer that elects to place funds into escrow pursuant to this subsection shall annually certify to the Secretary of Justice that it is in compliance with this subsection. The Secretary of Justice may bring a civil action on behalf of Puerto Rico against any tobacco product manufacturer that fails in any year to place into escrow the funds required under this section shall:
(A) Be required within fifteen (15) days to place such into escrow as shall bring it into compliance with this section. The court, upon a finding of a violation of this subsection, may impose a civil penalty to be paid to the General Fund of the Commonwealth of Puerto Rico in an amount not to exceed five percent (5%) of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed one hundred percent (100%) of the original amount improperly withheld from escrow;
(B) in the case of a knowing violation, be required within fifteen (15) days to place such funds into escrow as shall bring it into compliance with this section. The court, upon a finding of a knowing violation of this subsection, may impose a civil penalty to be paid to the General Fund of the Commonwealth of Puerto Rico in an amount not to exceed fifteen percent (15%) of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed three hundred percent (300%) of the original amount improperly withheld from escrow, and
(C) in the case of a second knowing violation, be prohibited from selling cigarettes to consumers, within Puerto Rico (whether directly or through a distributor, retailer or similar intermediary) for a period not to exceed two (2) years.
Each failure to make an annual deposit required under this section shall constitute a separate violation. A tobacco product manufacturer that violates this section shall be required to pay the costs and attorney’s fees incurred by the Government of Puerto Rico during a successful prosecution under clause (3) of this subsection.
History —Dec. 28, 2000, No. 453, § 2; June 29, 2001, No. 47, § 3; Sept. 22, 2004, No. 413, § 1.