Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

British American Tobacco To Pay $635 Million For Violating North Korea Sanctions

British American Tobacco To Pay $635 Million For Violating North Korea Sanctions

The company knew it was violating sanctions placed on Pyongyang over its development of nuclear weapons, US officials said.
British American Tobacco has agreed to pay more than $600 million to settle charges it sold cigarette materials to North Korea for years in violation of US sanctions, the US Justice Department announced Tuesday.

In the most severe action ever taken by US authorities against a company for breaking North Korea sanctions, BAT's Singapore subsidiary also agreed to plead guilty to felony charges of bank fraud and sanctions-breaking.

The Justice Department said that over 2007-2017, BAT operated a web of front and shell companies to supply North Korea cigarette makers.

The company knew it was violating sanctions placed on Pyongyang over its development of nuclear weapons, US officials said.

In 2007, BAT's Standing Committee, including top company executives in London, approved the scheme "due to concerns over its public association with North Korea and difficulty remitting profits out of the country," the US Treasury said in a statement.

Selling to NKorea's embassy

Besides trading with North Korea, the BAT operation routed dollar payments from trade through US banks, masking the origins of the funds, according to the charges.

BAT's Singapore subsidiary "maintained control over all relevant aspects of the North Korean business," the Justice Department said.

And even though BAT moved to pull out of the setup in 2016 due to increasing international sanctions on Pyongyang, it continued to sell cigarettes to North Korea's embassy in Singapore in 2017, US officials said.

"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 $629 million; BAT said it was $635 million, without explaining the difference.

The company, which has already set aside $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 United States unilaterally imposing even stronger restrictions on trade with the country.

Separate NKorea 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 $74 million in payments through the US banking system, violating sanctions.

Meanwhile North Korean manufacturers brought in some $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 $5 million reward for Sim and $500,000 each for Qin and Han.

If caught and convicted, they face up to 30 years in prison for bank fraud.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
×