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Thursday, February 22, 2024

For violating North Korea sanctions, British American Tobacco will have to pay more than $600 million

The US Justice Department said Tuesday that British American Tobacco has agreed to pay more than $600 million to resolve claims that it violated US sanctions on North Korea.

According to Assistant Attorney General Matthew Olsen, 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.”

This is the single-largest punishment against North Korea in the history of the Department of Justice, and Olsen described it as the “latest warning to businesses around the world about the costs and consequences of breaking US sanctions.”

The Justice Department estimated the total cost as $629 million, while BAT said it was $635 million.

The corporation said that the payment will not affect its financial advice to investors for 2023, even though it had already put aside $540 million to cover it.

“We deeply regret the misconduct arising from historical business activities that resulted in these settlements, and acknowledge that we fell short of the highest standards rightly expected of us,” BAT Chief Executive Jack Bowles said.

BAT's commercial dealings with North Korea between 2007 and 2017 were the subject of investigations by the US Department of Justice and Treasury Department's Office of Foreign Assets Control (OFAC).

The business said that it stopped all such actions in 2017.

Following Pyongyang's nuclear test in 2006, the United Nations placed sanctions on the DPRK, and the US unilaterally imposed even stricter trade restrictions.

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