VARIOUS: EUROPEAN UNION AND TEN MEMBER STATES FILE LAWSUIT IN U.S. AGAINST AMERICAN TOBACCO CONGLOMERATE RJ REYNOLDS IN MONEY-LAUNDERING CLAIM

Record ID: 640673

  • Title: VARIOUS: EUROPEAN UNION AND TEN MEMBER STATES FILE LAWSUIT IN U.S. AGAINST AMERICAN TOBACCO CONGLOMERATE RJ REYNOLDS IN MONEY-LAUNDERING CLAIM
  • Date: 1st November 2002
  • Summary: (EU) GRAPHICS (REUTERS) GRAPHIC
  • Embargoed: 16th November 2002 12:00
  • Keywords:
  • Location: BRUSSELS, BELGIUM / UNKNOWN LOCATION, NEW YORK / GRAPHICS / BAGHDAD, IRAQ / LONDON, ENGLAND, UNITED KINGDOM
  • City:
  • Country: Usa Russian Federation Belgium Iraq
  • Topics: Crime,Health,Finance,Politics
  • Reuters ID: LVA44IXYB0JAMC1UBP1Q2GVH3WNS
  • Story Text: The European Union and 10 member states have filed a lawsuit in the United States against the American tobacco conglomerate RJ Reynolds, in a money-laundering claim also involving the son of Iraqi President Saddam Hussein.
    The European Union (EU) accuses the company of selling cigarettes to a group of money-laundering crime syndicates, cheating the EU out of 100s of millions of euros in tax revenue. The company has called the claim absurd.
    A source familiar with the complaint tells Reuters that the EU case links Reynolds cigarettes to organised crime syndicates in the United States, Italy Switzerland, Turkey, Cyprus and Montenegro.
    It also alleges that the elder son of Saddam Hussein, Uday, has been involved in illicit tobacco trading linked to the company.
    In a statement issued late on Thursday: RJ Reynolds called for the suit to be dismissed, saying:
    "Any allegations that we were involved in or aware of money laundering, conspiracy or any other illegal activities are completely absurd."
    The revelation of the lawsuit had little impact on Reynolds share price, which closed higher on the New York session on Thursday.
    The case marks a change of tactics in the EU's long-running battle with the tobacco giants, some of which it accuses of smuggling cigarettes into the bloc, costing its taxpayers an estimated 90 billion euros (88.84 billion USD) a year.
    The EU has already taken aim at big tobacco companies, trying to recoup an estimated 90 billion euros a year in tax revenue lost to smuggling.
    The older suit against, Reynolds, Philip Morris Companies and Japan Tobacco was thrown out last year by a New York court on the grounds that a U.S. court cannot enforce a foreign tax claim.
    The EU is appealing that decision and is considering extending the new money laundering suit to other companies, beyond Reynolds.
    The EU will claim its economies suffer due to the cost of increased crime. Although it had not set a claim amount, the damage amounted to "hundreds of millions of euros," an EU official said.
    The complaint said Saddam Hussein's son Uday Hussein "oversees and personally profits from the illegal importation of cigarettes into Iraq."
    The shipments are a possible violation of United Nations and U.S. trade embargoes.
    An official said this was a "minor part" of detailed allegations of smuggling and money-laundering around the world.
    The case is backed by 10 EU governments: Italy, Germany, France, Spain, Portugal, Greece, Belgium, the Netherlands, Finland and Luxembourg.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2015. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register