Reemtsma Accused of Illegal Trade with Iraq

Germany's third-largest tobacco firm, Reemtsma, is being accused of smuggling cigarettes into Iraq in defiance of the U.N. embargo in place since the end of the Gulf War. A prosecutor in Hamburg said police raids have uncovered evidence showing Reemtsma sold over $250,000 worth of cigarettes to Iraq three years ago. Reemtsma also stands accused of evading German taxes.

Around 1,000 police officers raided the tobacco firm's headquarters and a number of private homes in Hamburg on Tuesday. The investigation follows allegations of cigarette smuggling and tax evasion, and police say one of the company's top executives is a suspect. But Reemtsma is by no means the only corporation suspected of cashing in on the international illegal tabacco trade.

For cigarette smugglers, business is booming. According to German investigators, the number of confiscated cigarettes has nearly doubled in the last five years. The European Union Commission estimates that illegal tobacco business cost the EU budget €2 billion each year. The Commission recently filed similar complaints against U.S. tobacco giant R.J. Reynolds, Philip Morris and Japan Tobacco.