British American Tobacco to pay $635M in North Korea sanctions case

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British American Tobacco (BAT) will pay more than $635 million to settle allegations the company violated U.S. sanctions against North Korea using a complex, yearslong scheme to import tobacco products into the country.

BAT engaged in a conspiracy to export tobacco products to North Korea via a Singapore-based subsidiary, according to the Treasury Department’s Office of Foreign Assets Control (OFAC) and Department of Justice (DOJ). The company divested from a joint venture between its Singapore subsidiary and a North Korean business in 2007 over concerns of public association with North Korea, an action that “purposefully obscured” its continued effective ownership and control over the venture, OFAC said Tuesday in its enforcement release.

Payments to BAT were remitted through Chinese accounts, shell companies, two U.S.-sanctioned North Korean banks, BAT’s Singapore-based subsidiary, and North Korea’s embassy in Singapore, OFAC said in its settlement agreement.

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