The European Commission is entitled to pursue legal action against companies in the United States, the EU's top court ruled in the latest twist in a long legal battle between Brussels and tobacco companies RJ Reynolds and Japan Tobacco.

The European Union's executive began proceedings in a U.S. court in 2000 against Japan Tobacco and RJ Reynolds, along with Philip Morris, on charges of smuggling and money-laundering. The Commission accused the companies of colluding in smuggling cigarettes to evade EU taxes.
After having its case thrown out, the Commission appealed in 2002, also unsuccessfully.However, a money-laundering case it brought against RJ Reynolds in the United States is still pending.
Japan Tobacco and RJ Reynolds hit back at Brussels, arguing that the Commission was not empowered to bring legal action in third countries.
Their case was rejected by the EU's number two court, the Court of First Instance, in 2003. Japan Tobacco and RJ Reynolds appealed to the European Court of Justice, the EU's top court.
On Tuesday it threw out that appeal, saying a decision to bring legal proceedings in a third country was not legally binding and could not be challenged before EU courts.
Philip Morris agreed in 2004 to pay US$ 1.25 billion over 12 years to finance the EU's fight against contraband cigarettes and settle its legal disputes. (pi)