Round Up: British American Tobacco (BAT) to Pay $629m for Illegal Sales to North Korea
US Department of Justice: United States Obtains $629 Million Settlement with British American Tobacco to Resolve Illegal Sales to North Korea, Charges Facilitators in Illicit Tobacco Trade
British American Tobacco (BAT) and its subsidiary, BAT Marketing Singapore (BATMS), one of the world’s largest manufacturers of tobacco products based in the United Kingdom, has agreed to pay combined penalties of more than $629 million to resolve bank fraud and sanctions violations charges with U.S. authorities, arising out of the companies’ scheme to do business in North Korea through a third-party company in Singapore, in violation of the bank fraud statute and the International Emergency Economic Powers Act (IEEPA). Separately, charges were unsealed today in the District of Columbia against a North Korean banker and Chinese facilitators for their roles in facilitating the illicit sale of tobacco products in North Korea.
According to court documents, BATMS pleaded guilty to a criminal information filed in the District of Columbia charging BAT and BATMS with conspiracy to commit bank fraud and conspiracy to violate IEEPA. BAT entered into a deferred prosecution agreement (DPA) related to the same charges.
Specifically, in 2007, BAT spun off its North Korea sales to a third-party company, issuing a press statement that it was no longer involved in North Korea tobacco sales. In reality, BAT continued to do business in North Korea through the third-party company and BATMS maintained control over all relevant aspects of the North Korean business. Between 2007 and 2017, BAT and BATMS ran the payments for the tobacco sold to North Korean entities through the third-party company, resulting in approximately $418 million of U.S. dollar cash and correspondent banking transactions from North Korea to the third-party company in Singapore – money that was then passed on to BATMS and BAT. To make these payments, North Korean purchasers used front companies so that U.S. banks – which processed the transactions – would not know about the connection to North Korea. Pursuant to the DPA and plea agreement, BAT and BATMS will pay a total of $629 million in penalties and fines… Read the full press release here: https://www.justice.gov/opa/pr/united-states-obtains-629-million-settlement-british-american-tobacco-resolve-illegal-sales
Read the British American Tobacco court document here: https://www.justice.gov/opa/press-release/file/1581536/download
Read the Indictment of others here: https://www.justice.gov/opa/press-release/file/1581541/download
US Department of Justice: British American Tobacco to Pay $629 Million in Fines for N. Korean Tobacco Sales; Charges Unsealed Against Tobacco Facilitators
US Department of Justice: Assistant Attorney General for National Security Matthew G. Olsen Delivers Remarks Announcing Significant Nation-State Threats Cases
I am Matt Olsen, the Assistant Attorney General for National Security at the Department of Justice. I am joined by my colleagues in the Justice Department: the U.S. Attorney for the District of Columbia, Matthew Graves, and FBI Assistant Director of the Counterintelligence Division, Suzanne Turner. We are also joined by Undersecretary of Treasury for Terrorism and Financial Intelligence, Brian Nelson, and Deputy U.S. Special Representative for North Korea, Jung Pak – who are both here to announce associated actions by their departments.
Today, in the culmination of a long-running investigation, the Justice Department is announcing a deferred prosecution agreement with British American Tobacco (BAT), one of the world’s largest producers of tobacco products, as well as a guilty plea by its subsidiary, BAT Marketing Singapore (BATMS). The agreement and the plea resolve charges for bank fraud and for violations of U.S. sanctions against North Korea.
Under the agreement, British American Tobacco will pay more than $629 million dollars in penalties.
This is the single largest North Korean sanctions penalty in the history of the Justice Department – and the latest warning to companies everywhere about the costs and consequences of violating U.S. sanctions… Read the full remarks here: https://www.justice.gov/opa/speech/assistant-attorney-general-national-security-matthew-g-olsen-delivers-remarks-announcing
US Department of the Treasury: Treasury Announces $508 Million Settlement with British American Tobacco Largest Ever Against Non-Financial Institution
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a $508 million settlement agreement with London-headquartered British American Tobacco p.l.c. (BAT) to resolve its apparent violations of U.S. sanctions on the Democratic People’s Republic of Korea (DPRK) and proliferators of weapons of mass destruction (WMD). This settlement is OFAC’s largest ever with a non-financial institution and reflects the statutory maximum penalty.
OFAC’s investigation found that BAT, one of the world’s largest tobacco companies, engaged in a seven-year conspiracy from 2009 to 2016 to send over $250 million in profits from a North Korean joint venture through U.S. financial institutions by relying on designated North Korean banks and a variety of intermediaries. BAT’s Singaporean subsidiary also exported tobacco to the North Korean Embassy in Singapore until 2017, using unwitting U.S. banks to receive or process these payments… Read the full press release here: https://home.treasury.gov/news/press-releases/jy1441
Office of Foreign Assets Control (OFAC): Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and British American Tobacco p.l.c.
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $508,612,492 settlement with British American Tobacco p.l.c. (“BAT”). BAT, a London, England-headquartered tobacco company, has agreed to settle its potential civil liability for apparent violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR) and the North Korea Sanctions Regulations (NKSR). The apparent violation of the WMDPSR arose from BAT’s formation of a conspiracy to remit approximately $250 million in payments from a North Korean joint venture, through bank accounts controlled by blocked North Korean banks, to BAT’s Singaporean subsidiary – in a manner that involved U.S. banks in clearing the transactions – between 2009 and 2016… Read the full press release here: https://ofac.treasury.gov/recent-actions/20230425
Read the Enforcement Action here: https://ofac.treasury.gov/media/931666/download?inline
Read the Settlement Agreement here: https://ofac.treasury.gov/media/931661/download?inline
US Department of State: U.S. Department of State Announces Reward Offers for Information Leading to the Arrests and/or Convictions of Three Transnational Criminals Violating DPRK Sanctions
The U.S. Department of State, through the Transnational Organized Crime Rewards Program (TOCRP), is announcing a reward offer of up to $5,000,000 for information leading to the arrest and/or conviction of Democratic People’s Republic of Korea (DPRK) national Sim Hyon-Sop. We are also offering separate reward offers of up to $500,000 each for information leading to the arrests and/or convictions of People’s Republic of China (PRC) nationals Han Linlin and Qin Gouming. As part of a whole-of-government action, these three individuals were charged by the Department of Justice with various criminal offenses, and Sim was sanctioned by the Department of the Treasury’s Office of Foreign Assets Control.
According to the Department of Justice’s indictment, Qin, Han, and Sim used multiple front companies to purchase tobacco products and other goods for North Korean customers and laundered U.S. dollars for these shipments. The tobacco imported by Qin, Han, and others into the DPRK was used to manufacture counterfeit cigarettes, the sales of which benefitted the DPRK regime… Read the full press release here: https://www.state.gov/u-s-department-of-state-announces-reward-offers-for-information-leading-to-the-arrests-and-or-convictions-of-three-transnational-criminals-violating-dprk-sanctions/
British American Tobacco: BAT reaches agreement with U.S. Department of Justice (DOJ) and U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)
BAT today announced that it has reached agreement with DOJ and OFAC to resolve previously disclosed investigations into suspicions of sanctions breaches. These concern business activities relating to the Democratic People’s Republic of Korea (North Korea) between 2007 and 2017.
British American Tobacco p.l.c. has entered into a deferred prosecution agreement (DPA) with DOJ and a civil settlement agreement with OFAC, and an indirect BAT subsidiary in Singapore has entered into a plea agreement with DOJ. The total amount payable to the U.S. authorities is $635,241,338 plus interest… Read the full press release here: https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DOCR8FJZ
