[Intl-tobacco] EU Appeals Smuggling Ruling

[Robert Weissman]

EU Appeals Tobacco Smuggle Ruling

The Associated Press
Friday, July 19, 2002; 5:19 PM

BRUSSELS, Belgium –– The European Union said Friday it has appealed a U.S.
court ruling dismissing a lawsuit against tobacco giants Philip Morris and
R.J. Reynolds in which EU lawyers claimed the companies sponsored cigarette
smuggling in Europe.

EU Budget Commissioner Michaele Schreyer said the EU was "determined to
continue" its case against the companies, adding that the fight against
smuggling untaxed cigarettes into the 15-nation bloc "remains a top priority."

An attorney for Philip Morris denied the allegations and said the company
expects the dismissal to stand.

"We are confident that the district court´s decision dismissing the case
will be affirmed on appeal," said Steven Rissman, an in-house attorney at
Philip Morris, the world´s largest tobacco firm.

"The proper place to pursue such claims is within the legal system of each
of the nations involved," R.J. Reynolds said in a statement issued Friday.

The EU´s executive office estimates "several hundred million euros (dollars)
in customs and tax revenue are lost every year," due to smuggling of
cigarettes from Eastern Europe into the EU.

The EU alleges that American tobacco companies are involved, causing
tremendous revenue losses for governments.

"Today there is no significant problem with Philip Morris product in
contraband channels anywhere in the world," Rissman said.

In its statement Friday, R.J. Reynolds disclaimed involvement in overseas
sales of its cigarettes, saying it "does not sell cigarettes in the European
Community or in any other international market."

"We manufacture and market cigarettes in the United States," the company
said. "In addition, Reynolds Tobacco and its employees were not involved in
the day-to-day operations of any of the separate companies selling ´RJR´
brand cigarettes in the international market."

On Feb. 19, the U.S. District Court in New York dismissed the EU´s
allegation, ruling there was no case for the companies to answer since the
EU failed to show American courts have jurisdiction to deal with
European tax claims.

The EU suit was filed last August on behalf of the European Union and 10
member states: Italy, Germany, France, Spain, Portugal, Greece, Belgium, the
Netherlands, Finland and Luxembourg.

Schreyer said the appeal would also include the support of the World Health
Organization, the U.S. Campaign for Tobacco-Free Kids and the U.S. Federal
Law Enforcement Officers Association.

EU officials have said they considered widening the case based on new
evidence that they claim will prove the tobacco companies conspired to
launder their profits.

The case is the EU´s second attempt to bring a suit against the tobacco
companies after a federal court in New York threw out a similar case last
July on a technicality.