LAUSANNE, Switzerland (AP) - U.S. tobacco company Philip Morris is challenging a European Union civil suit that alleges it has been involved in smuggling cigarettes into the 15-nation trade bloc.

The company this week filed papers with the Luxembourg-based European Court of First Instance, challenging the authority of the European Commission - the EU's executive arm - to initiate the lawsuit, Philip Morris said late Wednesday. The EU announced Nov. 6 it had filed a suit in New York against New York-based Philip Morris, which makes Marlboro cigarettes, and R.J. Reynolds Tobacco, based in Winston-Salem, N.C. and the maker of Camels, Winston and Salem cigarettes. It alleges breaches by the firms of the U.S. Racketeering Influenced and Corrupt Organization Act. It is seeking unspecified compensation for losses from unpaid customs duties and value added tax, and an injunction against cigarette smuggling. Philip Morris ``failed to understand why the European Commission chose to address the issues raised in this matter in a U.S. court rather than through regulatory and cooperative actions within the framework of the European Union,'' said David R. Davies, vice president of Philip Morris Europe. ``We will continue to vigorously contest in the United States the action brought in that jurisdiction,'' Davies added. ``However, we believe that the European judicial authorities must examine the critical question of whether the Commission has the legal authority to assess and recover customs duties and taxes that are matters reserved to the member states.'' EU officials allege that losses from cigarette smuggling run into billions of dollars. Davies said Philip Morris hopes ``to focus on working constructively with the European Commission and national governments'' in fighting contraband.

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