July 18, 2024

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Tobacco Company BAT to pay $635 for breaching N. Korea sanctions

After a subsidiary acknowledged sending cigarettes to North Korea in breach of sanctions, “British American Tobacco” was ordered to pay $635 million (£512 million) plus interest to US authorities.

The payment, according to US authorities, was linked to BAT activities in North Korea between 2007 and 2017.

The head of BAT, Jack Bowles, said they were very disappointed by the misconduct.

The United States imposed many sanctions on North Korea because of its ballistic and nuclear missile activities.

The settlement reached on Tuesday involved the “Office of Foreign Assets Control (OFAC)” of the Treasury Department and the “American Department of Justice (DOJ).”

BAT is the world’s largest tobacco-producing company and one of the UK’s top 10 biggest companies. Major cigarette brands, including Dunhill, Pall Mall, and Lucky Strike, are owned by BAT.

BAT announced in a statement that the company has “entered into delayed prosecution agreements with the DOJ and a civil settlement agreement with OFAC, and an indirect BAT subsidiary in Singapore has entered into plea agreements with the DOJ.”

According to the DOJ, BAT allegedly planned to deceive financial institutions in order to persuade them to handle transactions for North Korean businesses.

Kim Jong Un, the leader of North Korea, is well known for smoking frequently. Russia and China opposed the US request to have tobacco supplies to North Korea banned by the UN Security Council last year.

According to Matthew Olsen, assistant attorney general for the DOJ, “the settlement was the culmination of a long-running investigation.”

He also called it “the single largest North Korean sanctions penalty in the history of the Department of Justice.”

Sim Hyon-Sop, a 39-year-old North Korean banker; Han Linlin, a 60-year-old; and Qin Guoming, a 41-year-old Chinese facilitator, were all charged with crimes for enabling the sale of tobacco to North Korea.

They were charged with purchasing leaf tobacco for state-owned North Korean cigarette manufacturers and fabricating paperwork to deceive banks in the United States into completing transactions totaling $74 million. Due to these agreements, North Korean manufacturers, mainly those owned by military personnel, made nearly $700 million.

As a result of its nuclear testing and ballistic missile launches, North Korea has endured years of harsh sanctions. But Mr. Kim has persisted in expanding the nation’s weapons programme in spite of that.