Tobacco manufacturer settles for more than half a billion for trade with North Korea

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The entrance to BAT’s London headquarters
NOS News

Tobacco manufacturer British American Tobacco (BAT) has reached a settlement of more than 635 million dollars (577 million euros) in the United States after allegations of illegal trade with North Korea. A Singapore subsidiary of BAT has pleaded guilty to bank fraud and violation of US sanctions against North Korea.

The illicit tobacco sales to North Korea happened between 2007 and 2017, according to both BAT itself and the US Department of Justice. “This case and other similar cases serve as a shot across the bow for companies,” the Justice Department said in a statement. Never before has a breach of sanctions against North Korea been so costly for the guilty party.

In total, the Singaporean subsidiary of the company behind brands such as Lucky Strike and Pall Mall is said to have sold around $ 400 million worth of tobacco products to North Korea in a roundabout way. A third party that the Singapore branch worked with would have been responsible for the trade. All proceeds would have flowed back to the company in the Southeast Asian city-state.

Financing nuclear program

According to the United States, smuggled tobacco products are an important source of income for North Korea, which would use the proceeds to finance its nuclear program and the development of intercontinental ballistic missiles.

BAT CEO Jack Bowles has expressed regret for the mismanagement. He believes the tobacco company – the second largest in the world – has fallen short. The cigarette maker also says that he has tightened the ethical regulations that apply within the company.

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