The suit was filed by New York City and the attorneys general of California, Connecticut, Illinois and Pennsylvania.
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It alleged that such shipments allowed foreign sellers to avoid billions of dollars in taxes.
The shipments also allegedly allowed people too young to buy cigarettes in stores to get them through the mail.
The postal service has agreed to take steps stop those shipments.
"With today's action, we are not only getting the USPS to agree to address longstanding shortfalls in their practices, but are making clear to foreign shippers that their products may be seized and destroyed if they continue to ship cigarettes illegally through the mail," NYC Mayor Eric Adams said in a statement.
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The city's action follows prior successful actions against Federal Express, United Parcel Service, and LaserShip, among others, for shipping cigarettes in violation of the PACT Act.
Enacted by Congress in 2010, the Prevent All Cigarette Trafficking (PACT) Act prohibits the USPS from knowingly accepting or transporting cigarettes in the mail unless authorized by certain narrow exceptions.
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