The case represents the ‘single largest North Korea sanctions penalty’ in the US Department of Justice history.
British American Tobacco Plc (BAT) has agreed to pay more than $635m to US authorities after a subsidiary pleaded guilty to charges that it conspired to violate American sanctions by selling tobacco products to North Korea and commit bank fraud, a US court filing and the company said on Tuesday.
The tobacco sales to the isolated communist nation at the heart of Tuesday’s settlement took place from 2007 to 2017, according to both the company and the Department of Justice. North Korea faces an array of United States sanctions to choke off funding for its nuclear and ballistic missile programme.
“This case and others like it do serve as a warning shot to companies,” Matthew Olsen, Assistant Attorney General of the Department of Justice’s National Security Division, told a news conference.
The case represents the “single largest North Korea sanctions penalty” in Department of Justice history, he said.
BAT, the world’s second-biggest tobacco group, makes Lucky Strike and Dunhill cigarettes.
Its annual report for 2019 said the group had operations in a number of nations that are subject to various sanctions, including Iran and Cuba, and that operations in these countries exposed the company to the risk of “significant financial costs”.
In a statement, British American Tobacco said it has entered into a deferred prosecution agreement with the Department of Justice, while one of its indirect subsidiaries in Singapore – BAT Marketing Singapore – pleaded guilty.
It also separately entered a civil settlement with the US Treasury’s Office of Foreign Assets Control.
The $635.2m payment to US authorities is the total to cover the three cases, the company said.
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