BRUSSELS, Belgium (AP) _ The European Union is not giving up its fight with U.S. tobacco companies despite the dismissal of a lawsuit that alleged Philip Morris and R.J. Reynolds are involved in smuggling cigarettes into Europe.

``Fighting fraud, and cigarette smuggling in particular, is and remains our top priority,'' EU Budget Commissioner Michaele Schreyer said in a statement Wednesday.

EU officials allege the U.S. tobacco companies intentionally oversupply countries in Eastern Europe and elsewhere so the surplus will be smuggled into the 15-nation EU, resulting in billions of dollars in lost taxes.

The tobacco companies have denied the allegations.

The EU's executive office, the European Commission, filed a civil lawsuit in November in federal court in New York seeking damages.

Judge Nicholas Garaufis dismissed the lawsuit Tuesday, ruling the European Commission suffered no direct injury since losses were actually suffered by the individual EU nations, Schreyer said. The court also refused to allow the EU member states to join the action at this stage, she added.

``The Commission and the member states will now together examine how best to go about pursuing their claims,'' Schreyer said.