On April 25th, the US Department of Justice announced that British American Tobacco (BAT) has been fined $635 million for selling tobacco products to North Korea, which is under US sanctions.
The US Department of Justice has claimed that BAT conspired with financial institutions in order to have them process transactions on behalf of North Korean entities. The department alleges that a third-party company operated under the control of BAT's Singapore subsidiary sold over $400m worth of tobacco products between 2007 and 2017, with the proceeds ultimately being remitted to British American Tobacco.
Scene of the Justice Department's press conference | Photo source: Associated Press
As part of a settlement agreement, BAT's Singaporean subsidiary has acknowledged that they conspired to commit bank fraud and violated sanctions. BAT admits to conducting tobacco business with North Korea between 2007 and 2017, despite publicly stating in 2007 that they would no longer engage in any business dealings with authoritarian regimes.
Jack Ma, the CEO of BAT, expressed regret over the inappropriate behavior caused by these business activities and admitted that BAT did not meet the highest standards it expected of itself.
According to reports, for the past two decades, North Korea has faced severe sanctions from the United States and the international community due to its nuclear weapons program and development of intercontinental ballistic missiles. The US Department of Justice has stated that the smuggling of tobacco products is considered a major source of income for North Korea's nuclear weapons and mass destruction weapons programs.
Assistant Attorney General Matthew Olsen said that the fine imposed on British American Tobacco is the largest penalty ever levied by the Department of Justice for violating sanctions against North Korea.
References:
British American Tobacco has been fined $635m for violating sanctions against North Korea.
A major tobacco corporation has been fined $629 million for breaking U.S. sanctions against North Korea.
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