By Timothy S. Donahue
Top Takeaways:
- Case closed: A U.S. judge dismisses BAT sanctions prosecution following a compliance deal.
- Massive penalty: The company paid roughly $630 million in fines and forfeitures.
- Long-running allegations: The DOJ said BAT cigarette sales to North Korea continued for years through a Singapore intermediary.
A U.S. federal judge has dismissed the government’s criminal sanctions case against British American Tobacco after the company completed a three-year deferred prosecution agreement related to illegal cigarette sales involving North Korea.
In a Monday filing in federal court in Washington, D.C., the U.S. Department of Justice said BAT had “fully complied” with the April 2023 agreement, including requirements to strengthen sanctions-compliance controls and corporate oversight procedures.
According to the DOJ, BAT paid approximately $630 million in combined fines and forfeitures as part of the resolution. The case was what the Justice Department previously described as the largest penalty ever imposed for violations of U.S. sanctions against North Korea.
BAT subsidiary BAT Marketing Singapore pleaded guilty in 2023 to conspiracy charges related to the conduct. Beryl Howell, U.S. District Judge for the District of Columbia, granted the government’s request to dismiss the case after prosecutors confirmed that BAT had fulfilled the terms of the agreement.
The DOJ alleged that the conduct occurred between 2007 and 2017. According to prosecutors, BAT publicly stated that it had exited the North Korean market after spinning off the business to a third-party company in Singapore.
But DOJ alleged that the company continued to sell tobacco products into North Korea through that intermediary structure. The government argued that the arrangement allowed BAT to continue supplying cigarettes to the sanctioned market while obscuring the company’s involvement from U.S. banks and regulators.
North Korea remains subject to extensive U.S. sanctions, partly tied to the country’s nuclear weapons and ballistic missile programs. The BAT case became one of the most significant sanctions enforcement actions ever involving the global tobacco industry because of both the scale of the alleged conduct and the financial penalties.
The company did not immediately issue public comment following the dismissal.
Earlier this year, hundreds of U.S. military service members, civilians, and family members filed a federal lawsuit seeking unspecified damages against 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.
