Hundreds of U.S. military service members, civilians, and family members have filed a federal lawsuit seeking unspecified damages against British American Tobacco (BAT) and one of its subsidiaries, alleging that the company helped finance North Korea’s weapons programs through illicit business activities that ultimately enabled terrorist attacks against Americans.
According to The Guardian, the lawsuit was filed Thursday in the U.S. District Court for the Eastern District of Virginia under a federal statute that allows terrorism victims to sue not only perpetrators but also third parties accused of aiding or abetting terrorist acts.
The complaint focuses on BAT’s historical involvement in North Korea’s tobacco industry. In 2001, BAT formed a joint venture with a North Korean state-owned company to manufacture cigarettes in the country. A 2005 Guardian investigation reported that the venture continued quietly despite the U.S. government’s public accusations that North Korea funded terrorism and its imposition of sanctions.
In 2007, BAT publicly stated that it had exited North Korea amid international pressure. However, the U.S. Department of Justice later alleged that BAT continued operating through a subsidiary, concealing the activity from regulators and financial institutions.
In 2023, BAT entered into a deferred prosecution agreement with the U.S. government, while its subsidiary pleaded guilty to criminal charges. BAT and the subsidiary agreed to pay $629 million to resolve allegations of conspiracy to violate U.S. sanctions and commit bank fraud.
During a 2023 Senate hearing, Matthew Olsen, then head of the Justice Department’s National Security Division, said BAT’s North Korea venture involved approximately $418 million in banking transactions that he said generated revenue “used to advance North Korea’s weapons program.”
At the time, BAT issued a public apology.
“On behalf of BAT, we deeply regret the misconduct arising from historical business activities that led to these settlements,” then-CEO Jack Bowles said in a statement. “Adhering to rigorous compliance and ethics standards has been, and remains, a top priority for BAT.”
The newly filed civil lawsuit alleges that profits from BAT’s cigarette operations and cigarette smuggling were used by North Korea to fund weapons development, which were later supplied to Iran’s Revolutionary Guard Corps (IRGC) and Hezbollah. The plaintiffs claim those weapons were used in several attacks, including missile strikes on U.S. forces at al-Asad and Erbil airbases in Iraq on January 8, 2020, and a 2022 missile attack in Kurdistan.
According to the complaint, more than 100 U.S. service members were diagnosed with traumatic brain injuries after the 2020 attack, and more than a dozen people were killed in the 2022 Kurdistan strike. The plaintiffs include approximately 200 service members, several family members, and the estate of a civilian who was killed while assisting refugees during the Kurdistan attack.
“This case alleges a clear nexus between BAT’s clandestine scheme in North Korea and the weapons used in deadly terrorist attacks,” said Ryan Sparacino, a lawyer at Sparacino PLLC representing the plaintiffs, in comments reported by The Guardian.
Another attorney for the plaintiffs, Raj Parekh, former acting U.S. attorney for the Eastern District of Virginia, said the case seeks accountability for conduct that allegedly enabled terrorist violence against Americans.
The lawsuit argues that BAT was aware — or recklessly disregarded — the risk that its North Korea operations were financing terrorism, citing public warnings, government reports, and BAT’s own internal monitoring of sanctions risks.
The case follows recent court rulings clarifying the scope of liability for companies accused of indirectly supporting terrorism. In 2023, the U.S. Supreme Court unanimously ruled that social media companies could not be held liable for Islamic State attacks unless there was proof they knowingly and substantially assisted the attacks. By contrast, a federal appeals court last week revived a separate lawsuit against pharmaceutical companies accused of paying bribes to groups linked to terrorism in Iraq.
BAT has not publicly commented on the newly filed civil lawsuit.
