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11-01-02, 04:21 PM
R.J. Reynolds accused of funding Saddam’s regime
NEW YORK - Tobacco giant R.J. Reynolds has helped finance Saddam Hussein’s regime and a terrorist group by distributing cigarettes in Iraq, the European Union alleges in a new civil lawsuit.
R.J. Reynolds called the civil suit, filed in federal court in Brooklyn, “completely absurd.”
The EU claimed R.J. Reynolds did business with Iraq as part of a global smuggling scheme that has cheated the 15-nation EU out of billions of dollars in tax revenues over the past decade. The suit alleges company executives used Italian, Russian and Colombian organized groups to smuggle the cigarettes, then laundered proceeds through banks in New York.
"The defendants have, at the highest corporate level, determined that it will be a part of their operating business plan to sell cigarettes to and through criminal organizations and to accept criminal proceeds in payment for cigarettes by secret and surreptitious means,” said the suit, filed Wednesday.
A federal judge had dismissed a similar claim by the EU, ruling that US courts have no jurisdiction in foreign tax issues. The new suit takes a new tack by alleging money laundering was part of the plot.
R.J. Reynolds, based in Winston-Salem, North Carolina, and the maker of Winston, Camel and Salem cigarettes, denied any wrongdoing, and predicted the suit would again be dismissed. It is the second biggest US cigarette maker behind Philip Morris Inc.
"We operate our businesses in a legal, responsible manner,” the company said in statement. “Any allegations that we were involved in, or aware of, money laundering, conspiracy or any other illegal activities are completely absurd.”
In the previous case against R.J. Reynolds, Philip Morris and Japan Tobacco -- now going to appeal -- the EU alleged American tobacco companies intentionally oversupplied countries in eastern Europe and elsewhere so the surplus would inevitably be smuggled into the EU.
R.J. Reynolds’ international operations were sold in 1999 to Japan Tobacco.
The EU executive commission said in a statement that the latest suit sought “relief to stop the laundering of proceeds of illegal activities and to seek compensation for losses sustained.”
Supporting the EU head office were the governments of 10 EU nations: Italy, Germany, France, Spain, Portugal, Greece, Belgium, the Netherlands, Finland and Luxembourg.
The suit alleges the money laundering involved cigarettes paid for with money from illegal drugs and arms trade. The cigarettes ended up in Europe and beyond through intermediaries in Panama, Switzerland, Cyprus, Turkey, Montenegro and other countries.
The EU alleged the scheme extended to Iraq, where R.J. Reynolds intermediaries sought to distribute cigarettes there in violation of US sanctions. In 1996, the company supplied more than 100 containers -- each holding 10 million cigarettes -- to an Iraqi distributor, the suit said.
Some containers were allegedly smuggled through northern territories controlled by the Kurdistan Workers’ Party. The group -- deemed a terrorist organization by US officials and blamed for terrorist attacks in Europe -- would collect a fee for each container in a deal cut with Hussein, the suit said.
"The illegal cigarette trade is so lucrative to Saddam Hussein and his family that they allow several Kurdish groups to import these cigarettes,” the suit said. “Saddam Hussein’s son Uday Hussein oversees and personally profits from the illegal importation of cigarettes into Iraq.” AP
NEW YORK - Tobacco giant R.J. Reynolds has helped finance Saddam Hussein’s regime and a terrorist group by distributing cigarettes in Iraq, the European Union alleges in a new civil lawsuit.
R.J. Reynolds called the civil suit, filed in federal court in Brooklyn, “completely absurd.”
The EU claimed R.J. Reynolds did business with Iraq as part of a global smuggling scheme that has cheated the 15-nation EU out of billions of dollars in tax revenues over the past decade. The suit alleges company executives used Italian, Russian and Colombian organized groups to smuggle the cigarettes, then laundered proceeds through banks in New York.
"The defendants have, at the highest corporate level, determined that it will be a part of their operating business plan to sell cigarettes to and through criminal organizations and to accept criminal proceeds in payment for cigarettes by secret and surreptitious means,” said the suit, filed Wednesday.
A federal judge had dismissed a similar claim by the EU, ruling that US courts have no jurisdiction in foreign tax issues. The new suit takes a new tack by alleging money laundering was part of the plot.
R.J. Reynolds, based in Winston-Salem, North Carolina, and the maker of Winston, Camel and Salem cigarettes, denied any wrongdoing, and predicted the suit would again be dismissed. It is the second biggest US cigarette maker behind Philip Morris Inc.
"We operate our businesses in a legal, responsible manner,” the company said in statement. “Any allegations that we were involved in, or aware of, money laundering, conspiracy or any other illegal activities are completely absurd.”
In the previous case against R.J. Reynolds, Philip Morris and Japan Tobacco -- now going to appeal -- the EU alleged American tobacco companies intentionally oversupplied countries in eastern Europe and elsewhere so the surplus would inevitably be smuggled into the EU.
R.J. Reynolds’ international operations were sold in 1999 to Japan Tobacco.
The EU executive commission said in a statement that the latest suit sought “relief to stop the laundering of proceeds of illegal activities and to seek compensation for losses sustained.”
Supporting the EU head office were the governments of 10 EU nations: Italy, Germany, France, Spain, Portugal, Greece, Belgium, the Netherlands, Finland and Luxembourg.
The suit alleges the money laundering involved cigarettes paid for with money from illegal drugs and arms trade. The cigarettes ended up in Europe and beyond through intermediaries in Panama, Switzerland, Cyprus, Turkey, Montenegro and other countries.
The EU alleged the scheme extended to Iraq, where R.J. Reynolds intermediaries sought to distribute cigarettes there in violation of US sanctions. In 1996, the company supplied more than 100 containers -- each holding 10 million cigarettes -- to an Iraqi distributor, the suit said.
Some containers were allegedly smuggled through northern territories controlled by the Kurdistan Workers’ Party. The group -- deemed a terrorist organization by US officials and blamed for terrorist attacks in Europe -- would collect a fee for each container in a deal cut with Hussein, the suit said.
"The illegal cigarette trade is so lucrative to Saddam Hussein and his family that they allow several Kurdish groups to import these cigarettes,” the suit said. “Saddam Hussein’s son Uday Hussein oversees and personally profits from the illegal importation of cigarettes into Iraq.” AP