(Recasts first paragraph; adds reaction, further comments from judge)

By Peter Kaplan

WASHINGTON, March 16 (Reuters) - A federal judge ruled on Friday that a ban she imposed last year on marketing cigarettes as "light" and "low-tar" should apply to foreign sales as well as those in the United States.

U.S. District Judge Gladys Kessler, who issued a landmark ruling against the tobacco industry in August, said in a follow-up decision that a ban on the use of health messages should "apply to actions of the (tobacco companies) outside the United States."

Kessler rejected the tobacco companies' request for a clarification that would limit the restrictions to statements they made, and cigarettes they sold, in the United States.

"To rule otherwise would not only frustrate the salutary anti-fraud principles embodied in (U.S. racketeering law), but would also allow the Defendants to spread fraudulent and misleading health messages and descriptors about their products throughout the world," Kessler wrote in her opinion.

The marketing restrictions, along with the rest of Kessler's ruling, were stayed in October while the tobacco companies pursue an appeal.

Altria Group Inc. <MO.N> said Kessler's clarification of was "contrary to the law" but would have no immediate operational effect. The company said in a statement that it would now press ahead with its appeal.

Kessler's August ruling found cigarette makers had broken the law, but could not be forced to fund a multibillion-dollar quit-smoking campaign, as the government had sought.

Kessler said the companies suppressed research, destroyed documents and manipulated nicotine levels to perpetuate addiction, but an appeals court ruling prevented her from slapping the companies with costly remedies.

Targeted in the government's 1999 lawsuit were Altria's Philip Morris USA unit; Loews Corp.'s <LTR.N> Lorillard Tobacco unit, which has a tracking stock, Carolina Group <CG.N>; Vector Group Ltd.'s <VGR.N> Liggett Group; Reynolds American Inc.'s <RAI.N> R.J. Reynolds Tobacco unit and British American Tobacco Plc <BATS.L> unit British American Tobacco Investments Ltd.

Representatives of British American Tobacco and Vector had no immediate comment. A spokesman for Reynolds American said the decision has no impact on the company since it has no significant overseas sales. A spokesman for Lorillard was not immediately available.

Liggett is exempt from the remedies under Kessler's earlier ruling because the company withdrew from the conspiracy in the mid-1990s.

In Friday's decision, Kessler said the fraudulent conduct by cigarette makers over the years "involved extensive activity that occurred outside our national borders."

Fraudulent activity, such as phony research and document destruction, took place in countries including Japan, Thailand, Australia, Germany and Brazil, Kessler said.

"All these activities, despite being carried out beyond our shores, were part of the defendants' scheme to defraud the American public about the adverse health effects of smoking and environmental tobacco smoke," the judge said.

Kessler's latest decision was applauded by the Campaign for Tobacco-Free Kids, which called it "an important blow for global health."

"Today's ruling underscores the potential of this case, brought by the U.S. Department of Justice, to fundamentally change the tobacco industry's harmful practices and save lives," the group said.

The use of descriptions such as "light" and "low-tar" is already banned in many countries, including Australia and Brazil and members of the European Union, according to anti-smoking groups.

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