[Intl-tobacco] Philip Morris Asks Court to Throw Out Smuggling Lawsuit (fwd)

[Robert Weissman]

Philip Morris Asks Court to Throw Out Smuggling Lawsuit
by James G. Neuger
Source: Bloomberg News, Thursday, 12/21/00

 Brussels, Dec. 20 (Bloomberg) -- Philip Morris Cos. and R. J. Reynolds
Tobacco Holdings Inc. asked a European court to declare that the European
Commission lacked authority to file a lawsuit in U.S. courts alleging the
company smuggled cigarettes into the European Union.

The commission's suit, seeking unspecified financial damages, was filed
Nov. 6 by in U.S. District Court in Brooklyn, New York. It accused Philip
Morris and R.J. Reynolds of depriving the EU of customs duties in a
smuggling operation that began in the late 1970s.

The commission, the EU's executive agency, had no right to file the suit
and usurped the powers of the bloc's 15 national governments in doing so,
Philip Morris said in a statement.

``We will continue to vigorously contest in the United States the action
brought in that jurisdiction,'' the statement said. ``However, we believe
that the European judicial authorities must examine the critical question
of whether the commission has the legal authority to assess and recover
customs duties and taxes that are matters reserved to the member states.''

Philip Morris asked the European Court of First Instance to rule that the
commission lacked the authority to file the suit. The court is the appeals
division of the European Court of Justice, the EU's highest court.

R.J. Reynolds spokesman Seth Moskowitz said his company used similar
arguments.

Tobacco smuggling costs EU countries 2 billion euros ($1.7 billion) in
lost tax revenue annually, the commission said in July. The EU is also
fighting tobacco smuggling with stiffer border controls and increased
customs cooperation among member governments. Almost 30 percent of
Europeans are regular smokers.