EU Files New Lawsuit Against Tobacco Firms for Smuggling to Evade Taxes

On August 6, 2001, the European Union filed a new lawsuit against two U.S. tobacco multinationals, alleging Philip Morris and R.J. Reynolds engage in cigarette smuggling to evade taxes. In particular, the European Commission alleges the two U.S. companies purposely oversupply countries in Eastern Europe and elsewhere so the surplus cigarettes will be smuggled into the EU, thereby triggering the loss of billions of U.S. dollars in tax money. The companies have denied the allegations. The Commission demands compensation for financial losses it alleges it lost in customs duties and taxes. It also demands a U.S. court order to prevent future smuggling…[more]