April 25, 2023 at 19:38 CET
Updated 9 minutes ago
Image source, Getty Images
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Kim Jong Un, seen here in 2017, is known to be a heavy smoker
British American Tobacco has to pay $635 million (£512 million) plus interest to US authorities after a subsidiary admitted it sold cigarettes to North Korea in violation of sanctions.
US authorities said the comparison relates to BAT activities in North Korea between 2007 and 2017.
“We deeply regret the misconduct,” said BAT boss Jack Bowles.
The US has imposed severe sanctions on North Korea for its nuclear and ballistic missile activities.
Tuesday’s settlement came between BAT and the US Department of Justice (DOJ) and the Treasury Department’s Office of Foreign Assets Control.
BAT is one of the world’s largest multinational tobacco companies and one of the UK’s top 10 companies. It owns major cigarette brands such as Lucky Strike, Dunhill and Pall Mall.
In a statement, BAT said it has “entered into an agreement of deferred prosecution with the DOJ and a civil settlement agreement with OFAC, and an indirect BAT affiliate in Singapore has entered into a settlement agreement with the DOJ.”
The DOJ said BAT also conspired to defraud financial institutions to get them to process transactions on behalf of North Korean companies.
North Korea’s ruler Kim Jong Un is considered a heavy smoker. Last year, the US tried to get the UN Security Council to ban tobacco exports to North Korea, but Russia and China vetoed it.
At a briefing on Tuesday, Assistant Attorney General for the Justice Department Matthew Olsen said the settlement was the “culmination of a lengthy investigation” and described it as “the largest single sentence for North Korean sanctions in the Justice Department’s history.”
He said BAT was involved in an “elaborate plan to circumvent US sanctions and sell tobacco products to North Korea” through subsidiaries.
“Between 2007 and 2017, these third-party companies sold tobacco products to North Korea and received approximately $428 million.”
Criminal charges were also uncovered against North Korean banker Sim Hyon-Sop (39) and Chinese brokers Qin Guoming (60) and Han Linlin (41) for aiding the sale of tobacco to North Korea.
A $5million (£4.4million) bounty was offered for any information leading to Mr Sim’s arrest or conviction, and $500,000 (£402,905) rewards were offered for each of the other two suspects .
They were accused of buying tobacco leaves for state-owned North Korean cigarette makers and forging documents to trick US banks into processing $74 million worth of transactions. North Korean manufacturers, including one owned by the military, made about $700 million thanks to these deals.
For years, Pyongyang has faced multiple rounds of harsh sanctions in response to its ballistic missile launches and nuclear tests.
However, that hasn’t stopped Mr Kim from further developing the country’s weapons program.
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Watch: North Korea launches Hwasong-15 missile