British American Tobacco Plc has agreed to pay over $635 million to US authorities following charges against its subsidiary for conspiring to violate US sanctions by selling tobacco products to North Korea and committing bank fraud.
According to the Justice Department and the company, these tobacco sales took place between 2007 and 2017.
North Korea has a range of US sanctions in place to choke off funding for its nuclear and ballistic missile programs.
“This case and others like it do serve as a warning shot to companies,” warned Matthew Olsen, Assistant Attorney General of the Justice Department’s National Security Division.
This case represents the “single largest North Korea sanctions penalty” in Justice Department history, he said. British American Tobacco, the world’s second-biggest tobacco group known for making Lucky Strike and Dunhill cigarettes, has operations in several countries that are subject to various sanctions, including Iran and Cuba.
The company’s CEO Jack Bowles stated in a press release, “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.”
The Justice Department also revealed criminal charges against North Korean banker Sim Hyon-Sop, 39, and Chinese facilitators Qin Guoming, 60, and Han Linlin, 41 as part of a “multi-year scheme to facilitate the sale of tobacco to North Korea.
” The three defendants remain at large. The US Department of State is offering a reward of $5 million for Sim and a reward of $500,000 for Qin and Han for information leading to their capture. On Monday, the Treasury imposed sanctions on Sim, cutting him off from accessing the US banking system.