[NOTE: This is a summary of the
actual agreement. To review the actual version at the NAAG Web site here.]
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Public Health Initiatives
Prohibits Youth Targeting
- Prohibits targeting youth in advertising, promotions or marketing.
- Barrs industry actions aimed at initiating, maintaining or increasing
Bans Cartoon Characters
- Bans use of cartoons in the advertising, promotion, packaging or labeling
of tobacco products.
Restricts Sponsorships By Brand Names
- Restricts sponsorships by tobacco brand names.
- Prohibits brand name sponsorship of events with a significant youth
audience or team sports (football, basketball, baseball, hockey or soccer).
- Prohibits sponsorship of events where the paid participants or contestants
- Limits tobacco companies to one brand name sponsorship per year (after
current contracts expire or after three years - whichever comes first).
- Allows corporate sponsorship of athletic, musical, cultural, artistic
or social events as long as the corporate name does not include the brand
name of a domestic tobacco product.
- Bans tobacco brand names for stadiums and arenas.
- Limits duration and area of advertising for sponsored events.
Bans Outdoor Advertising
- Bans all outdoor advertising, including: billboards, signs and placards
larger than a poster in arenas, stadiums, shopping malls, and video game
- Bans transit advertising of tobacco products.
- Tobacco billboards and transit ads must be removed within 150 days
after the Master Settlement Agreement Execution Date.
- Allows states to substitute, at industry expense and for the duration
of billboard lease periods, alternative advertising which discourages youth
- Bans tobacco companies from entering into agreements which would prohibit
advertising discouraging tobacco use.
- Requires tobacco companies to designate a contact person for sign removal
in each state.
Bans Placement of Tobacco Products
- Bans payments to promote tobacco products in movies, television shows,
theater productions or live performances, videos and video games.
Bans Sale of Merchandise With Tobacco Brand Names
- Beginning July 1, 1999, bans distribution and sale of non-tobacco merchandise
with brand-name logos (caps, T-shirts, backpacks, etc.).
Bans Youth Access To Free Samples
- After Master Settlement Agreement Execution Date, free samples cannot
be distributed except in a facility or enclosed area where the operator
ensures no underage person is present.
Bans Proof of Purchase Gifts
- No gifts can be offered to youth in exchange for the purchase of tobacco
products, coupons or proofs of purchase.
- Bans distribution of gifts through the mail without proof of age (legible
driver's license certified to be valid by the gift recipient).
- Provisions effective after Master Settlement Agreement Execution Date.
Prohibits Third Parties From Using Tobacco Brand Names
- Tobacco companies are prohibited from authorizing third parties to
use or advertise brand names.
- Tobacco companies must designate a contact in each state who will respond
to Attorney General complaints of prohibited third party activity.
- Exempts licensing agreements or contract in existence as of July 1,
1998, although contracts cannot be extended beyond current times.
Bans Non-Tobacco Brand Names
- Bans future cigarette brands from being named after recognized non-tobacco
brand or trade names (such as Harley Davidson, Yves Saint Laurent, Cartier)
or nationally recognized sports teams, entertainment groups or individual
Sets Minimum Pack Size At 20 Cigarettes
- Limits minimum pack size to 20 cigarettes through March 31, 2001.
- Tobacco companies prohibited from opposing state legislation which
bans the manufacture and sale of packs containing fewer than 20 cigarettes.
Changes The Corporate Culture
Requires Corporate Commitments To Reduce Youth Access and Consumption
Beginning 180 days after the Master Settlement Agreement Execution Date,
- Develop and regularly communicate corporate principles which commit
to complying with the Master Settlement Agreement and reducing youth smoking.
- Designate executive level manager to identify ways to reduce youth
access and consumption of tobacco.
- Encourage employees to identify additional methods to reduce youth
access and youth consumption.
Disbands Tobacco Trade Associations
- Disbands the Council for Tobacco Research, the Tobacco Institute, and
the Council for Indoor Air Research.
- Requires all records of these organizations that relate to any lawsuit
to be preserved.
Provides Regulation and Oversight of New Trade Organizations
Requires any new trade association to adopt bylaws that provide:
- Officers of the association will be appointed by the board, be employees
of the association and will not be employed by a member tobacco company.
- Legal counsel will be independent and not serve as counsel to member
- Minutes of board of director meetings will be prepared and maintained
for at least five years.
- For the purpose of enforcing the Master Settlement Agreement, antitrust
staff for any settling state may inspect and copy all non-privileged, non-work-product
records and interview association directors, officer and employees.
Restricts Industry Lobbying
Stops Industry Assault On Tobacco Control Laws
- After state specific finality, tobacco companies will be prohibited
from opposing proposed state or local laws or administrative rules which
are intended to limit youth access to and consumption of tobacco products.
- The industry must require its lobbyists to certify in writing they
have reviewed and will fully comply with settlement terms including disclosure
of financial contributions regarding lobbying activities and new corporate
- In states without laws regarding financial disclosure of lobbying,
requires disclosure of lobbying costs to the state Attorney General.
- Prohibits lobbyists from supporting or opposing state, federal or local
laws or actions without authorization of the companies.
- Prohibits the industry from lobbying for the diversion of settlement
money to non-tobacco or non-health related uses or legislation which would
eliminate or diminish state rights under the settlement.
Protects State And Local Youth Access Laws
- Prohibits new challenges by the industry against the enforceability
of constitutionality of tobacco control laws, ordinances, and rules passed
prior to June 1, 1998.
Dismisses Lawsuits Against State Laws
- Requires the industry to dismiss, without fees, all claims against
- Requires the industry to dismiss pending legal challenges related to
underage smoking and environmental tobacco smoke laws.
No Criminal Liability
- Specifies that states expressly do not waive any criminal liability
based on federal stats or, local law.
Opens Industry Records and Research
Opens Public Access To Tobacco Documents
- Effective on the Master Settlement Agreement Execution Date, tobacco
companies will release documents which are under protective orders in state
lawsuits and have no privilege of trade-secret claim.
- Settling states may seek court-approved public release of any documents
which have been subject to an order or filing, prior to August 17, 1998,
denying privilege, work product or trade secret protection. The industry
can content the action.
Creates Website For Industry Documents
- Requires tobacco companies to open, at their expense, a Website which
includes all documents produces in state and other smoking and health related
- Requires the industry to maintain the site for ten years in a user-friendly
and searchable format (requires and index and other features to improve
- Requires the industry to add, at its expense, all documents produced
in future civil actions involving smoking and health cases.
- Oversized or multi-media records will not be placed on the Website,
but they will be made available to the public through the Minnesota depository.
- The industry will provide the National Association of Attorneys General
with up to $100,000 for a computer consultant to review and make recommendations
regarding the industry's Website plans.
- NAAG's consultant can seek input from settling sate officials, public
health officials and other users of the Website.
Stops Conspiracy To Hide Research Regarding Smoking and Health
Prohibits manufacturers from jointly contracting or conspiring to:
- Limit information about the health hazards from the use of their products:
- Limit or suppress research into smoking and health; and
- Limit or suppress research into the marketing or development of new
- Prohibits the industry from making any material misrepresentations
regarding the health consequences of smoking.
Creates A Foundation And $1.45 Billion Public Education Fund
Creates A National Foundation to Reduce Teen Smoking and Substance Abuse
- Requires the industry each year for ten years to pay $25 million to
fund a charitable foundation which will support the study of programs to
reduce teen smoking and substance abuse and the prevention of diseases
associated with tobacco use.
The NAAG Executive Committees will provide for creation of the foundation.
- The foundation will governed by a seven-member board of directors.
NAAG, the National Governors Association and the National Conference of
State Legislatures each will appoint a board member and the three will
select the final four members with expertise in public health, medicine
and child psychology.
The foundation will:
- Carry out a nation wide, sustained advertising and education program
to counter youth tobacco use and educate consumers about the cause and
prevention of diseases associated with tobacco use.
- Develop, disseminate and test the effectiveness of counter advertising
- Develop disseminate and test the effectiveness of model classroom educational
programs, including programs targeting at-risk population.
- Develop, disseminate and test the effectiveness of criteria for effective
- Commission studies, fund research and publish reports on factors that
influence youth smoking and substance abuse.
- Develop targeted training and information programs for parents.
- Maintain a library of foundation studies, reports and publications.
- Track and monitor youth smoking and substance abuse with a focus on
reasons for increases or failures to decrease tobacco and substance use
- The foundation is prohibited from engaging in political or lobbying
- Includes a severance clause for settling states which are prohibited
by state law from entering into the foundation portion of the agreement.
Creates A National Public education Fund
- Requires the industry to pay $1.45 billion over the next five years
for a National Public Education Fund.
- The agreement includes incentive to the states for continued funding
(from non-participating manufacturers).
- The fund is established to carry out a nation sustained advertising
and education program to counter youth tobacco use and educate consumers
about tobacco-related diseases.
- The fund may make grants to states and political subdivisions to carry
out the fund's purposes.
- Grants from the fund will be made by the foundation.
- Industry payments to the foundation and education fund will be held
in an escrow account until state-specific finality in a required number
- Outside contributions can be made to the foundation and specifically
to the education fund.