Two giant American tobacco companies accused of smuggling cigarettes into the European Union have rejected legal action being taken against them by EU lawyers in New York.

Philip Morris -- the manufacturers of Marlboro -- said they hadn't yet seen the allegations, and were behind European anti-smuggling moves.

P.J. Reynolds -- the makers of Camel -- denied outright being involved in smuggling.

The European Union is invoking American law against racketeering to demand compensation for lost tax revenues, and a specific ban on the future trade in contraband.

The move comes a week after the British government said it was investigating smuggling allegations against another firm, British American Tobacco or B-A-T.

From the newsroom of the BBC World Service