British American Tobacco, a London-based company with a subsidiary based in Singapore, must pay $630 million in fines to the U.S. government. Company officials admitted to selling tobacco through a North Korean government-connected business between 2009 and 2017 and receiving payments in U.S. dollars.
The United States has imposed strict sanctions against North Korea because of that country’s nuclear weapons development program, including prohibiting American banks from processing transactions that originate in North Korea. To evade this prohibition, according to court documents, British American Tobacco and co-conspirators “enacted an elaborate scheme of utilizing a network of front companies located throughout the world” to conceal the origin of the payments.
“During the relevant time period, the U.S. banks unknowingly processed correspondent banking transactions for U.S. dollar transactions originating in North Korea,” a charging document unsealed Tuesday read. “Which they would not have processed had they known the true nature of the transaction.”
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The documents lay out how the company allegedly tried to deceive banks and regulators by issuing a statement in 2007 that said it would no longer be doing business in North Korea and had “agreed in principle” to sell its share of a cigarette company in North Korea. But, in reality, the Singapore-based subsidiary of British American Tobacco maintained significant control over the North Korea operations, the documents state.
British American Tobacco said in a statement Tuesday that it ceased all business in North Korea in 2017. “We deeply regret the misconduct arising from historical business activities that led to these settlements,” the statement said.
“In recent years we have transformed our compliance and ethics programme, which encompasses sanctions, anti-bribery, anti-corruption and anti-money laundering,” Jack Bowles, the company’s chief executive, said in the statement.
At the plea agreement and sentencing hearing Tuesday morning, U.S. District Judge Beryl A. Howell said that while British American Tobacco terminated its business with North Korea in 2017, before U.S. officials launched their investigation, the company failed to properly disclose the violations.
Howell said British American Tobacco is being “appropriately punished for that.”
This is a developing story. It will be updated.
The United States has imposed strict sanctions against North Korea because of that country’s nuclear weapons development program, including prohibiting American banks from processing transactions that originate in North Korea. To evade this prohibition, according to court documents, British American Tobacco and co-conspirators “enacted an elaborate scheme of utilizing a network of front companies located throughout the world” to conceal the origin of the payments.
“During the relevant time period, the U.S. banks unknowingly processed correspondent banking transactions for U.S. dollar transactions originating in North Korea,” a charging document unsealed Tuesday read. “Which they would not have processed had they known the true nature of the transaction.”
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The documents lay out how the company allegedly tried to deceive banks and regulators by issuing a statement in 2007 that said it would no longer be doing business in North Korea and had “agreed in principle” to sell its share of a cigarette company in North Korea. But, in reality, the Singapore-based subsidiary of British American Tobacco maintained significant control over the North Korea operations, the documents state.
British American Tobacco said in a statement Tuesday that it ceased all business in North Korea in 2017. “We deeply regret the misconduct arising from historical business activities that led to these settlements,” the statement said.
“In recent years we have transformed our compliance and ethics programme, which encompasses sanctions, anti-bribery, anti-corruption and anti-money laundering,” Jack Bowles, the company’s chief executive, said in the statement.
At the plea agreement and sentencing hearing Tuesday morning, U.S. District Judge Beryl A. Howell said that while British American Tobacco terminated its business with North Korea in 2017, before U.S. officials launched their investigation, the company failed to properly disclose the violations.
Howell said British American Tobacco is being “appropriately punished for that.”
This is a developing story. It will be updated.
