British American Tobacco to pay R12bn to US authorities over North Korean activities

British American Tobacco agreed to pay $635.2 million (almost R12 billion) to US authorities to resolve investigations into the cigarette maker’s activities in North Korea.

The UK company reached a deferred prosecution agreement with the US Department of Justice and a civil agreement with the US Treasury Department’s Office of Foreign Asset Control over its business activities in North Korea from 2007 to 2017, BAT said Tuesday in a statement.

The Financial Times reported in 2010 that North Korea generated currency by re-exporting cigarettes manufactured by BAT, and the company said at the time it had halted exports to North Korea.

BAT said it took a £450 million ($540 million) provision related to the matter in its half year report in July. The maker of Lucky Strike cigarettes said Tuesday its full-year guidance is unaffected by the penalty.

“We deeply regret the misconduct arising from historical business activities that led to these settlements,” Jack Bowles, BAT’s chief executive, said in a statement.  – bloomberg