Induk Bentoel Fined IDR 8.9 T for Selling Cigarettes to North Korea


Tobacco parent company Bentoel Group, British American Tobacco (BAT), was fined US$600 million or IDR 8.9 trillion (exchange rate of 14,886 per US dollar) by United States of America for selling cigarettes to North Korea (North Korea).

The company has expressed a willingness to pay the fine. The agreement was announced alongside criminal charges against the company for violating North Korean sanctions, conspiracy to commit bank fraud and conspiracy to violate the International Emergency Economic Powers Act.

Prosecutors say the conspiracy spanned from 2007 to 2017. During that time, North Korea conducted some 280 electronic fund transactions through subsidiaries or front company for a total of over US$341 million.

BAT and its subsidiary British-American Tobacco Marketing Singapore (BATMS) are said to have entered into a deferred prosecution agreement with the US Department of Justice (DOJ).

“(BAT) has entered into a deferred prosecution agreement with the DOJ and a civil settlement agreement with the (Ministry of Finance),” the company said in a statement.

“BAT’s indirect subsidiary in Singapore has entered into a plea agreement with the DOJ. The total amount due to US authorities is US$635,241,338 plus interest,” the company continued.

Meanwhile in court documents, the Justice Department charged a North Korean banker and two Chinese nationals with helping facilitate the sale of tobacco in North Korea.

Prosecutors allege that proceeds from the tobacco sales were used to benefit the North Korean government, including helping fund its weapons of mass destruction program.

BATMS and the North Korean Tobacco Company are owned by the North Korean Government. They formed a joint venture in 2001 to manufacture BAT cigarettes in North Korea for domestic sale, according to the Justice Department. In 2007, prosecutors said BAT publicly announced that it would sell all of their stake in the joint venture, but quietly continued to maintain influence over the company and continue to profit from sales to North Korea.

That arrangement continued into 2009, when the US Treasury Department placed additional sanctions on North Korean banks.

According to court documents, North Korea will use Chinese companies to process payments between the country and BATMS to obscure payments.

[Gambas:Video CNN]


[Gambas:Video CNN]


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