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    RJR Sued by EU

    European Union claims big tobacco company laundered money.

    BRUSSELS -- The European Commission filed a civil lawsuit in a U.S. court against cigarette maker R.J. Reynolds Inc., accusing the firm of money laundering.

    The European Union's (EU) executive arm said it would "seek compensation for economic and other losses." It declined to say how much money it was seeking, but EU officials said the damage amounted to "hundreds of millions of euros," according to Reuters.

    R.J. Reynolds was not immediately available to comment.

    The move follows an unsuccessful case the EU brought last year accusing R.J. Reynolds and two other cigarette makers, Philip Morris, and Japan Tobacco, of smuggling. The EU said then it would pursue related money-laundering charges. Although the new case only targets R.J. Reynolds, the number two U.S. tobacco firm, which makes Camel and Winston cigarettes, EU officials said they had not ruled out targeting other firms.

    "The purpose of this new claim is to obtain injunctive relief to stop the laundering of the proceeds of illegal activities and to seek compensation for the losses sustained," the Commission said in a statement. "The Commission is determined to win its fight against money laundering, cigarette smuggling and connected serious cross-border crimes."

    Cigarette smuggling is the single biggest fraud against the EU, according to the Commission. Losses due to the illicit trade amounted to some 90 billion euros ($88.84 billion) in 2000.

    The EU is still appealing against a decision of the New York District Court to dismiss last year's case on the grounds that a U.S. court cannot enforce a foreign tax claim.

    According to the Commission, the money-laundering aspects of the case are not affected by that ruling. The case is backed by 10 EU governments: Italy, Germany, France, Spain, Portugal, Greece, Belgium, the Netherlands, Finland and Luxembourg.

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