OFAC $508M+ settlement with British American Tobacco p.l.c.

OFAC has posted a Notice of a $508,612,492 settlement between OFAC and British American p.l.c. ("BAT"), a London, England, based tobacco company. BAT has agreed to settle its potential civil liability for apparent violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations (WMDPSR) and the North Korea Sanctions Regulations (NKSR).

The apparent violation of the WMDPSR arose from BAT's formation of a conspiracy to remit approximately $250 million in payments from a North Korean joint venture, through bank accounts controlled by blocked North Korean banks, to BAT's Singaporean subsidiary - in a manner that involved U.S. banks in clearing the transactions - between 2009 and 2016. The apparent violations of the NKSR arose from BAT's Singaporean subsidiary's use of the U.S. financial system to receive payments for its exports of tobacco to the North Korean Embassy in Singapore. The settlement for the statutory maximum civil monetary penalty amount reflects OFAC's determination that BAT’s conduct was egregious and not voluntarily disclosed.

According to OFAC's Enforcement Release, OFAC took this action concurrently with the U.S. Department of Justice. BAT's obligation to pay a $503,263,807 penalty to OFAC for its apparent conspiracy violation of the WMDPSR will be considered satisfied by payment of a greater amount in satisfaction of penalties assessed by DOJ arising out of the same pattern of conduct during the same time period. BAT has agreed to separately remit the portion of the settlement amount totaling $5,348,685 reflecting the apparent violations of § 510.212 of the NKSR.