U.S. Tobacco Companies Accused of Terrorist Ties and Iraqi Sanctions-Busting

WASHINGTON — American tobacco companies have violated sanctions against Iraq for years by sending billions of cigarettes into the country, often with the aid of a terrorist organization, the European Union has alleged.

The allegations, made in recent filings in U.S. District Court in New York, were the latest salvos in a civil racketeering lawsuit against R.J. Reynolds and Philip Morris by the European Community and 10 member nations. The suit accused tobacco companies of running a global and decades-long cigarette smuggling operation that robbed national treasuries of billions of dollars in tax revenue and became a money-laundering vehicle for criminal organizations.

On Tuesday, Judge Nicholas Garaufis dismissed the lawsuit, saying that current U.S. law prohibited him from ruling on what amounted to a foreign tax claim. But he left open the possibility that the European Union could pursue money-laundering charges against the tobacco companies. The EU said later it would file an amended lawsuit.