British American Tobacco has reached an agreement with US authorities to pay a penalty of $635.2m (PS512m), relating “misconduct”, in the sanctions-hit North Korea.
The UK-based second largest tobacco company in the world announced that it had entered into a deferred prosecutor agreement after an investigation related to its activities between 2007 and 2017 in this isolated nation.
BAT announced that it had reached an agreement with the US Department of Justice as well as another organization who had filed a civil suit.
This was after a subsidiary had pleaded guilty on charges of conspiring to violate US sanctions and commit fraud by selling tobacco to North Korea.
The US sanctions regime is designed to stop the Communist countries from funding their nuclear and missile programmes.
North Korea has a high smoking rate, and its leader Kim Jong Un is often seen holding a cigarette when he is photographed by the state media.
BAT had made previous provisions for a settlement. It said that the agreement did not impact its 2023 guidance.
The shares ended the day with a 1.7% gain.
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Jack Bowles, the chief executive of BAT said, “On behalf BAT, we regret the misconduct that resulted from historic business activities which led to these settlements and acknowledge that we did not meet the highest standards that were expected of us.”
BAT has always placed a high priority on adhering to strict compliance and ethical standards.
In recent years, we have transformed the compliance and ethics program, which includes sanctions, anticorruption, antibribery and anti-money-laundering.
The significant steps that have already been taken as well as the refinements of the programme as a result of these settlements will make us better equipped to run a sustainable and responsible business.
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