The European Commission is sueing tobacco giant RJ Reynolds for money-laundering, in the latest salvo in a long-running case about alleged cigarette smuggling involving organised crime and Iraq.
The new case is a "civil money-laundering action" against RJ Reynolds filed in New York by the Commission and 10 members of the European Union, which are seeking to recoup millions of dollars in tax revenues lost to contraband tobacco.
The fresh attempt, brought under the Racketeer Influenced and Corrupt Organizations (RICO) act, comes after the New York District Court threw out an EU action against RJR, Philip Morris and Japan Tobacco in February.
The EU alleges that US tobacco companies are involved in smuggling cigarettes into the 15-nation bloc, costing member states several hundred million euros (dollars) a year in lost customs revenues.
RJR is the second-biggest tobacco company in the United States after Marlboro maker Philip Morris.
Crime groups including the Italian and Russian mafias launder ill-gotten gains through the purchase of RJR cigarettes, the source said on condition of anonymity.
"The main purpose of this complaint is to obtain injunctive relief, to stop the laundering by RJ Reynolds of the proceeds of illegal activities," the Commission said.
"In addition, the complaint will provide the opportunity to seek compensation for economic and other losses the EC or the 10 member states have sustained in the past resulting from the defendants' money-laundering activities."
The 10 EU members taking part in the civil action are Belgium, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal and Spain.
The lawsuit is the latest salvo in the European Commission's war on "big tobacco".
Health Commissioner David Byrne on Tuesday accused Formula One bosses of surrendering to the "tainted money" of tobacco in scrapping next year's Belgian Grand Prix, after the government here refused to allow cigarette advertising at the race.
The Commission has been pushing since May 2001 for a total ban on tobacco advertising at sporting events in EU member states.
AFP