• Mon
  • Dec 22, 2014
  • Updated: 2:27pm

EU wins right to sue Reynolds American for money laundering

PUBLISHED : Thursday, 24 April, 2014, 10:02pm
UPDATED : Thursday, 24 April, 2014, 10:02pm

Reynolds American, maker of Camel cigarettes, could be sued by the European Union over claims it orchestrated a worldwide scheme to launder drug money, a US federal appeals court ruled in reviving an action filed more than a decade ago.

The EU could use United States' racketeering law to sue Reynolds American, a three-judge panel of the court ruled on Wednesday, reversing a lower-court judge's decision to dismiss the suit. The lawsuit was filed by the European Community, which was legally replaced by the EU in 2009.

Reynolds American was considering additional appeals and would again ask the federal court to dismiss the case for other reasons, Bryan Hatchell, a spokesman for the tobacco company, said. John Halloran, a lawyer for the EU, did not immediately respond to a request for comment.

The EU claims Reynolds American directed a scheme in which Colombian and Russian criminal organisations laundered drug profits through European money brokers.

The brokers allegedly sold discounted euros obtained from the drug sales to cigarette importers, who then purchased Reynolds American cigarettes from wholesalers, according to the complaint.

US district judge Nicholas Garaufis dismissed the EU complaint in 2011 calling it a "structure-less morass of allegations, devoid of any sequential description of events".

Garaufis concluded the claims had to be thrown out because the alleged money laundering took place outside the US.

The EC first sued Reynolds American and other tobacco companies in 2000, in several cases that were litigated as far as the US Supreme Court.

Among the nations suing Reynolds American are Germany, Spain, Poland, Sweden, Greece and Bulgaria.


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