The criminal fine is the largest in Justice Department history for a sanctions violation.
- DOJ fines British American Tobacco $630 million for selling to North Korea in violation of sanctions
- The Treasury Department reached a $508 million civil settlement with the company.
- Federal authorities said North Korea funds its military by selling counterfeit cigarettes overseas.
Federal authorities announced Tuesday $629 million in criminal fines and $508 million in a civil settlement with a subsidiary of British American Tobacco for selling products to North Korea for years despite sanctions against the transactions.
The complex scheme featured the company selling tobacco products through its Singapore subsidiary to North Korean companies in China, to avoid detection.
The transactions provided North Korea with tobacco to produce counterfeit cigarettes for sale at home and aboard, officials said. The profits flowed back to the North Korean government and its military, which have been sanctioned by the international community to deter the development of nuclear weapons.
“This is the single largest North Korean sanctions penalty in the history of the Department of Justice,” Matthew Olsen, head of the department’s national security division. “Sanctions and export controls are among the most powerful weapons in our arsenal.”
What were the charges?
The Justice Department agreed to defer prosecution of British American Tobacco, but its subsidiary, BAT Marketing Singapore, pleaded guilty to conspiracy to commit bank fraud and conspiracy to violate sanctions for its “egregious conduct,” Olsen said.
British American Tobacco had announced in 2007 it halted all sales to North Korea, Olsen said. But it continued to sell tobacco to North Korea from 2007 to 2017, he said.
“The profits from this scheme are staggering, and a substantial portion of them are believed to flow back to the North Korean government and its military,” said Matthew Graves, U.S. attorney for the District of Columbia.
The Treasury Department also imposed a $508 million civil settlement with British American Tobacco for violating sanctions.