US Judge Dismisses BAT's Criminal Case Over North Korea Sanctions After Compliance
Overview of the BAT Sanctions Case and Dismissal
By Jonathan Stempel
Case Background and Deferred Prosecution Agreement
May 11 (Reuters) - A U.S. judge on Monday dismissed the government's criminal case accusing British American Tobacco of conspiring to violate American sanctions by selling cigarettes to North Korea, after the company complied with a three-year deferred prosecution agreement.
Compliance Measures and Financial Penalties
In a filing in the federal court in Washington, D.C., the Department of Justice said BAT "fully complied" with the April 2023 agreement, including by enhancing its compliance procedures, and paid about $630 million including a fine and forfeiture.
Significance of the Case
The case represented the Justice Department's largest penalty for violating U.S. sanctions against Pyongyang, the department said at the time. A BAT subsidiary, BAT Marketing Singapore, pleaded guilty to a conspiracy charge.
Company and Department Responses
BAT's Reaction
BAT did not immediately respond to requests for comment after market hours in London. Its brands include Dunhill, Lucky Strike and Pall Mall.
Details of the Violations
The Justice Department said the illegal tobacco sales occurred between 2007 and 2017, after BAT spun off its North Korean business to a third-party company in Singapore, and publicly said it had abandoned North Korean tobacco sales.
Continued Sales Through Third Parties
BAT nonetheless continued to sell tobacco products to North Korea through the third-party company, the Justice Department said.
Legal Resolution and Broader Context
Judge's Decision
U.S. District Judge Beryl Howell granted the Justice Department's dismissal request.
Context of US Sanctions on North Korea
North Korea faces an array of U.S. sanctions, in part to choke off funding for nuclear and weapons programs.
(Reporting by Jonathan Stempel in New York; Editing by David Gregorio)
