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Tobacco Company BAT Pleads Guilty to Violating U.S. Sanctions on North Korea

Story by Sadie Gurman • WSJ

WASHINGTON—A U.K. tobacco company agreed to pay more than $635 million to resolve charges that it conspired to violate U.S. sanctions by selling cigarettes to North Korea in what Justice Department officials described as a brazen scheme to conceal illicit business by routing it through a third-party company in Singapore.


Tobacco Company BAT Pleads Guilty to Violating U.S. Sanctions on North Korea© Igor Golovniov/SOPA Images/LightRocket/Getty Images

British American Tobacco PLC entered into a deferred prosecution agreement with federal prosecutors over illegal sales that took place over more than a decade, even after the company announced that it had abandoned its North Korean business, U.S. officials said. But BAT, which makes Lucky Strike and Pall Mall cigarettes, continued selling tobacco products to the isolated regime through a Singaporean front company.

Between 2009 and 2019, prosecutors said, the company bought leaf tobacco for North Korean state-owned cigarette makers and used front companies and fake documents to get U.S. banks to process $74 million in transactions they would have otherwise blocked.

The transactions earned the North Korean manufacturers around $700 million in revenue, prosecutors said.

“We deeply regret the misconduct arising from historical business activities that led to these settlements, and acknowledge that we fell short of the highest standards rightly expected of us,” BAT’s Chief Executive Jack Bowles said in a statement.

Write to Sadie Gurman at sadie.gurman@wsj.com