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Friday, 8 May, 1998, 10:45 GMT 11:45 UK
EU bid to stub out cigarette smuggling
Cigarettes
European authorities suspect US tobacco firms of dealing with smugglers
The European Union has asked the United States for help in investigating the suspected involvement of US tobacco companies in the smuggling of American cigarettes into Europe, it has been reported.

RJ Reynolds Tobacco will be the first US tobacco firm to come under investigation, a senior EU official told The New York Times.

This is the first time Europe has sought help from Washington in fighting the growing illicit cigarette trade, which European prosecutors strongly suspect is carried out with the complicity of US tobacco firms.

It is believed that the manufacturers routinely sell American cigarettes to traders and dealers who immediately resell them into black markets set up to evade foreign taxes and offer leading brands at a discount.

"We are always puzzled how the cigarette manufacturers are paid and the only way we can obtain this information is from them," said Per Brix Knudsen, director of the EU's Brussels-based anti-fraud unit.

"As Reynolds has previously refused any cooperation whatsoever we intend to take up this issue with the US authorities," he added.

A spokesman for RJ Reynolds said his firm did not generally identify its customers, but added that it had "always cooperated with authorities."

The spokesman, however, admitted his company was continuing to sell to a trader, Michael Haenggi, who told The New York Times last year that his clients were smugglers.

The investigation is focusing on a shipment of 80 million American cigarettes seized in Barcelona in January.

The cigarettes, worth more than $3m, were shipped in November to Greece, where they were loaded onto seven long-haul trucks and stored aboard a huge cargo ship bound for Spain.

Investigators, The New York Times said, are convinced Reynolds knew the shipment was destined for the black market.

Cigarette smuggling cost Europe some $1.5bn dollars in lost taxes last year alone.

A US Treasury Department spokesman said the US government had responded in the past to similar requests from other countries and would be "as helpful as possible" with the EU request.

See also:

12 Mar 98 | EU Enlargement
European war on organised crime
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