Archive for Friday, July 21, 2000

U.S. tobacco companies face smuggling lawsuit in Europe

July 21, 2000


— The European Union said Thursday it would sue several American tobacco companies for lost tax revenue, claiming it had evidence the companies were involved in smuggling cigarettes into the 15-nation EU.

The smuggling operation has cost the EU and its member countries billions in lost revenue and is the single biggest fraud on the EU's budget, said Luc Veron, spokesman for the European Commission, the EU's executive body.

He refused to make public the names of the companies allegedly involved or say where the suit would be filed.

"We're not in a position to confirm brands or details or quantities or even the time scale of the alleged activities," said Peter Guilford, another EU spokesman. He said the court action would be filed within the next few months.

The EU will take the matter to a civil rather than criminal court because it wants cash, not punishment, Veron said.

"The civil action means we want our money back," said Veron, briefing reporters on the Commission's decision. "The Commission is determined to defend the financial interests of the European community. So we want money."

How much? "Billions. Billions," Veron said. "Name it euros or dollars. Billions."

The EU's case follows a two-year investigation by the anti-fraud office, the spokesmen said.

Officials at the U.S. Mission to the EU said they were aware of the investigation and confirmed there have been contacts between the EU anti-fraud investigators and the Justice Department, but they said a civil suit against U.S. tobacco companies would be a private case not involving the U.S. government.

While declining to describe how widespread the smuggling operation is, the spokesmen said it involved bringing illegal cigarettes into every country in the EU.

Veron said entire shipping containers full of cigarettes are imported illegally from third countries, which he declined to name.

"It involves several thousand truckloads every year," he said.

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