Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Smuggling Suit May Cost Philip Morris $1Bln

BRUSSELS -- The Financial Times reported Monday that U.S. tobacco company Philip Morris was offering $1 billion to settle a lawsuit over cigarette smuggling brought against it by the European Commission.

A Commission spokeswoman would not confirm the figure, but said the European Commission is in talks with Philip Morris, a unit of Altria Group, about ending the lawsuit.

She was speaking after the maker of Marlboro, L&M and Chesterfield said it had offered "substantial payments over a number of years" to help fund anti-contraband and anti-counterfeit efforts in a bid to end the EU litigation.

"I can confirm that we have been in talks with Philip Morris over the terms of an agreement to combat illegal trade in cigarettes," the spokeswoman said.

The European Union executive has been waging a long-running lawsuit in U.S. courts accusing the company, along with U.S. rival R.J. Reynolds, of colluding in the smuggling of cigarettes to evade customs and taxes in the EU.

"We have not yet finalized these talks. I can confirm that there are payments envisaged over a number of years, to the Commission and 10 member states. These payments should not be considered a fine," the spokeswoman added.

The company said in a statement issued Saturday that a draft agreement had been drawn up by the two sides but still needed to be approved by EU member states and the board of directors of Philip Morris International.

The Commission said an end to the dispute was in sight.

"It would be an agreement to cooperate in some areas to fight against fraud, including ... tracking products to ensure Philip Morris products are sold legally," the spokeswoman said.