British American Tobacco to pay hundreds of millions in fines for trade with North Korea
The cunning scheme made it impossible to guess that the money was coming from the DPRK
British American Tobacco (BAT), one of the world's largest cigarette and tobacco manufacturers, has been circumventing sanctions against North Korea for years by continuing to do business with a local company and selling its products to Pyongyang. For its activities, which were also approved by BAT's central office, the tobacco manufacturer will receive a record fine of $635 million in the history of such cases.
Source. This was reported by the Financial Times.
The management of BAT's Singapore unit discussed with a representative of a local distributor how they could avoid losing the customer instead. BAT's partner proposed to abandon the use of "North" in the name of the buyer, writing simply "Korean Embassy" in all invoices, but after discussions, they went even further and renamed North Korea to the most abstract "Client".
The US Department of Justice, the US Office of Foreign Assets Control, and the US Department of the Treasury found that for several years, BAT, which produces Kent, Dunhill, and Lucky Strike, not only continued to cooperate with the North Korean Ryugyong Corporation, but also actually directly controlled all transactions with it.
The money went through the following scheme: North Korean sanctioned banks sent payments to a Chinese bank, which, through a US correspondent bank, sent a similar amount to the accounts of BAT's Singapore office, and from there the proceeds went to BAT's US accounts, so the US authorities did not actually see the money coming from North Korea.
The tobacco giant had to finally abandon its cooperation with the DPRK in 2017, when a new round of sanctions against Pyongyang was being considered. In 2017, the company was simply trying to cover its tracks. This case will be instructive for other companies that continue to take risks for the sake of profit, because it "shows that such greed is too expensive," said Hugh Griffiths, former UN sanctions coordinator, in a conversation with the publication.
Background. As a reminder, in Ukraine, the AMCU opened a case against Philip Morris for disseminating unconfirmed information about IQOS.
If you have read this article to the end, we hope that means it was useful for you.
We work to ensure that our journalistic and analytical work is of high quality, and we strive to perform it as competently as possible. This also requires financial independence. Support us for only UAH 196 per month.
Become a Mind subscriber for just USD 5 per month and support the development of independent business journalism!
You can unsubscribe at any time in your LIQPAY account or by sending us an email: [email protected]
