In court filings preceding the judge's dismissal, lawyers for the European Union argued that there was "clear and convincing evidence that there is a link between cigarette smuggling and terrorism" and submitted hundreds of pages of documents showing cigarette shipments from the United States taking a circuitous journey to Spain, Cyprus and Turkey before arriving in Iraq.

"Since the early 1990s, United States tobacco companies have distributed their products from the United States through the European Community and into Iraq," they said in a Feb. 1 filing. "Distribution of U.S.-brand cigarettes into Iraq continues on virtually a daily basis."

The EU lawyers, led by Kevin Malone, a partner in a Florida firm, included a sealed document in their filing with the court, which they said "authoritatively shows that the cigarette shipments into Iraq were linked to the PKK." The PKK, or the Kurdistan Workers Party, is a separatist group accused of a series of bombings in Western Europe. Washington has labeled the group a terrorist organization.

"Based upon international cooperation in this matter, the European Community has learned that the scheme to ship cigarettes into Iraq involved the Kurdistan Workers' Party, known as the PKK," the EU lawyers said, arguing that the shipments enriched not only the terrorists but also the regime of Saddam Hussein, whose son, Uday, reportedly controls cigarette smuggling in Iraq.

The EU also included a Jan. 4, 2002, affidavit from a man identified as a Turkish security consultant. Tugrul Ozsengul said he had visited the Habur border crossing between Turkey and Iraq in December 2001 and "witnessed that Winston cigarettes and Philip Morris brand cigarettes were being shipped across the border into Iraq.

"I questioned people working and living in the area about these shipments and learned that almost every day lorries, mainly of the above-mentioned brands, have been shipped to Iraq, and this situation has persisted for several years. Additionally, I learned that some of these cigarettes were being taken to Iran from Iraq," he said. The EU had earlier filed documents with the court that alleged the tobacco companies smuggled cigarettes into Iran, in much the same way they allegedly have to other countries.

Despite the brief reference to Philip Morris brands and Iran, the majority of the EU filings focused on RJR and Japan Tobacco, which purchased RJR Nabisco's international tobacco division in 1999 and created an American subsidiary operating out of Puerto Rico.

The EU lawyers included dozens of copies of bills of lading and other documents from foreign customs agencies, as well as a Jan. 29, 2002, statement from a Cypriot Customs officer, to bolster their claim that U.S.-brand cigarettes shipped from a plant in San Juan ended up in Iraq. Three Turkish customs notices also were included, "verifying the actual and final export of the cigarettes to Iraq," the lawyers said.

"For many years, R.J. Reynolds Tobacco International S.A. (Geneva) provided consignments to Cypriot companies, often for massive amounts of Winston brand cigarettes. Part of the scheme was to falsely declare that the shipments were destined for export (i.e., to "Russia") when, in fact, the products were destined for countries outside of Cyprus and Russia (i.e., Iraq)," the EU lawyers said.

"It is hard to exaggerate the scope of the scheme inasmuch as since August 1999 — during a time when both RJR and Japan Tobacco had responsibility for management or oversight of the operations — approximately 570,000 master cases (or 5.7 billion cigarettes) were distributed through Cyprus."

Many of those shipments, the lawyers said, were destined for Iraq even though their bills of lading stated specifically: "United States law prohibits disposition of these commodities to North Korea, Vietnam, Iraq, or Cuba unless otherwise authorized by the United States."

The Iraqi shipments began with RJR and simply continued after Japan Tobacco acquired the company's international tobacco division, the lawyers argued. One June 4, 1999, invoice, from RJ Reynolds Tobacco International S.A. Geneva, was almost identical to 2001 invoices by Japan Tobacco Geneva, indicating, the lawyers said, "that this particular routing through Cyprus was initiated by RJ Reynolds Tobacco and then subsequently adopted by Japan Tobacco, Inc."

In another filing on Feb. 13, EU lawyers included documents from a breach-of-contract lawsuit in Cyprus, in which one cigarette distributor sued another and R.J. Reynolds Tobacco International S.A. over which RJR distributor had the rights to the Iraqi market. The 1997 Cyprus case "sets forth in great detail exactly how R.J. Reynolds solicited, managed, and operated the sales of huge volumes of cigarettes into Iraq from 1990 through 1997" and corroborates RJR's role in illegal cigarette sales to Iraq through the end of 2001, the EU said.

Iraq has been under a U.S. trade embargo since its 1990 invasion of Kuwait, and only government-approved food, medical and other specified humanitarian goods can be exported from the United States to Iraq.

But CIA director George Tenet told Congress in 1998 that key officials of Saddam Hussein's regime "live off the revenues generated through illicit trade." The EU lawyers cited reports identifying Saddam's son, Uday, as controlling cigarette smuggling operations in Iraq.

The EU submissions on terrorism followed a Jan. 11, 2002, hearing on a motion to dismiss the case. The tobacco companies argued that a similar lawsuit, filed by Canada, was dismissed last year after a federal appeals court upheld a ruling that an 18th century common law, called the Revenue Rule, prohibited U.S. courts from being used to collect foreign taxes.

EU lawyers had countered that the USA Patriot Act, passed after the Canada ruling and in the wake of the Sept. 11 terrorist attacks, clearly established that U.S. courts could be used to prosecute transnational crimes, such as smuggling and money-laundering. And their February submissions on cigarette smuggling and terrorism were meant to bolster that argument.

In response, the tobacco companies said they would not dignify the EU's "absurd factual allegations with a response," Irvin Nathan, a Philip Morris lawyer, wrote for the defendants. "In the unlikely event that it becomes necessary, defendants will address the substance of this irresponsible submission at the appropriate time."