British American tobacco to pay over $600 million for violating N.Korea sanctions

British American Tobacco has agreed to pay more than $600 million to settle allegations that it violated US sanctions on North Korea, the US Justice Department announced Tuesday.

“British American Tobacco and its subsidiary engaged in an elaborate scheme to circumvent US sanctions and sell tobacco products to North Korea through a corporate cutout in Singapore,” said Assistant Attorney General Matthew Olsen.

“This is the single largest North Korean sanctions penalty in the history of the Department of Justice, and the latest warning to companies everywhere about the costs and the consequences of violating US sanctions,” said Olsen.

The Justice Department put the full figure at $629 million; BAT said it was $635 million, without explaining the difference.

The company, which has already set aside $540 million to cover the settlement, said it would have no impact on its financial guidance to investors for 2023.

“We deeply regret the misconduct arising from historical business activities that led to these settlements, and acknowledge that we fell short of the highest standards rightly expected of us,” said BAT chief executive Jack Bowles.

The investigations by the US Department of Justice and Treasury Department’s Office of Foreign Assets Control (OFAC) concerned BAT’s business activities relating to North Korea between 2007 and 2017.

The company said it ended all such activities in 2017.

The United Nations imposed sanctions on North Korea after Pyongyang staged a nuclear test in 2006, with the United States unilaterally imposing even stronger restrictions on trade with the country.