“British American Tobacco and its subsidiary engaged in an elaborate scheme to circumvent US sanctions and sell tobacco products to North Korea through a corporate cutout in Singapore,” said Assistant Attorney General Matthew Olsen.
“This is the single largest North Korean sanctions penalty in the history of the Department of Justice, and the latest warning to companies everywhere about the costs and the consequences of violating US sanctions,” said Olsen.
DEEP REGRETS
The Justice Department put the full figure at US$629 million; BAT said it was US$635 million, without explaining the difference.
The company, which has already set aside US$540 million to cover the settlement, said it would have no impact on its financial guidance to investors for 2023.
“We deeply regret the misconduct arising from historical business activities that led to these settlements, and acknowledge that we fell short of the highest standards rightly expected of us,” said BAT chief executive Jack Bowles.
The company said it ended its activities with North Korea in 2017.
The United Nations imposed sanctions on North Korea after Pyongyang staged a nuclear test in 2006, with the US unilaterally imposing even stronger restrictions on trade with the country.
SEPARATE NORTH KOREA TOBACCO RING TARGETED
The Justice Department meanwhile issued an indictment for North Korean banker Sim Hyon-Sop and Chinese nationals Qin Guoming and Han Linlin for an operation they ran to acquire leaf tobacco for North Korean cigarette makers.
Dubai-based Sim worked with the others to route the trade and payments through a number of New Zealand, UK and Dubai-registered companies.
Their operations involved processing at least US$74 million in payments through the US banking system, violating sanctions.
Meanwhile, North Korean manufacturers brought in about US$700 million as a result of the trade, according to an indictment.
The indictment noted that North Korea’s tobacco industry is known for exporting large amounts of counterfeit cigarettes under popular brand names like Marlboro and Mild Seven, earning large amounts of foreign exchange.
The US State Department offered a US$5 million reward for Sim and US$500,000 each for Qin and Han.
If caught and convicted, they face up to 30 years in prison for bank fraud.
Source: CNA
