British American Tobacco Pays U.S. $635 Million for North Korea Cigarette Scheme
British American Tobacco has agreed to pay more than $635 million in fines for selling cigarettes to North Korea through a broker in Singapore in violation of US sanctions.
A small portion of the amount, about $5 million, was part of a civil settlement with the Treasury Department. The rest, Justice Department on Tuesdaywas the largest in that division’s history related to sanctions against North Korea.
British American Tobacco publicly announced in 2007 that it had agreed to sell a stake in a tobacco business it operated with a state-owned North Korean company, but the London-based company and its Singapore subsidiary have secretly split a third. 1 continued to operate the joint venture. The party, an independent conglomerate based in Singapore, federal prosecutors said in a court filing earlier this month.
North Korean clients paid at least $415 million through front companies over a period of about a decade, and in some cases used American banks, according to court documents. “Financial facilitators associated with the proliferation network,” said Bryan E. Nelson, Treasury Undersecretary for Terrorism and Financial Intelligence, in a statement issued by the Justice Department.
In 2016 and 2017, British American Tobacco’s Singapore subsidiary received payment for tobacco sales to the North Korean Embassy in Singapore, the Ministry of Finance, through a US bank or its overseas branches. stated in the settlement agreement.
On Tuesday, British American Tobacco’s Singapore subsidiary was found guilty in federal court of conspiracy to commit bank fraud and violated a 1977 law that allows the United States to seize foreign property under special circumstances. pleaded guilty to the crime. That law was used to impose sanctions on other countries after the September 11, 2001 attacks.
Justice Department Assistant Attorney General Matthew G. Olsen said the settlement “should give companies everywhere a clear warning about the costs and consequences of violating U.S. sanctions.”
Jack Bowles, CEO of British American Tobacco apologize in another statement Regarding “misconduct arising from past business activities that led to these settlements.” The company also said it had suspended North Korea-related business activities by September 2017.
A phone call to the company’s London headquarters before business hours on Wednesday was unanswered.
Separately, the same federal court on Tuesday unveiled indictments against a North Korean banker and two Chinese nationals from a state that borders North Korea and includes a city known as a haven for smugglers. Prosecutors said the three men were part of a nearly $700 million scheme to purchase tobacco for a North Korean state-owned tobacco manufacturer.
All three are wanted by the FBI. The charges against them include bank fraud and money laundering, with fraud charges carrying up to 30 years in prison.
The British American Tobacco reconciliation is a victory for the Biden administration at a time of heightened tensions with North Korea. The country has tested a number of missiles this year, including a solid-fueled intercontinental ballistic missile. The US also accuses North Korea of secretly shipping artillery shells to Russia to support its war effort in Ukraine.
Last year, the Biden administration imposed sanctions on several Asian businessmen and companies, including Singapore, saying they were helping North Korea develop its military and weapons programs.
The British American Tobacco settlement was announced the week South Korean President Yoon Seok-yeol was visiting Washington. His visit included a state dinner and meetings with US officials, among them North Korea will definitely come to prominence.