25th Apr 2023 17:07
(Alliance News) - British American Tobacco PLC on Tuesday said it will pay a USD635.2 million penalty related to a probe of the company's historic business activities in North Korea.
The investigation by the US Department of Justice and the Department of the Treasury's Office of Foreign Assets Control relate to North Korea-related sanctions breaches between 2007 and 2017.
The London-based maker of Dunhill, Kent and Lucky Strike cigarettes said it entered into a deferred prosecution agreement with the DoJ and a civil settlement agreement with OFAC. An indirect BAT subsidiary in Singapore has entered into a plea agreement with the DoJ.
BAT said the total amount payable to US authorities is around USD635.2 million, plus interest. It also noted it had ceased all business activities related to North Korea by September 2017.
It added that its annual guidance is unaffected by the deal. BAT had already booked a provision of USD540 million.
"On behalf of BAT, 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," said Chief Executive Officer Jack Bowles.
"Adhering to rigorous compliance and ethics standards has been, and remains, a top priority for BAT. In recent years we have transformed our compliance and ethics programme, which encompasses sanctions, anti-bribery, anti-corruption and anti-money laundering. The significant steps already taken, as well as the continued refinements to the programme that will be made as part of these settlements, will leave us even better equipped to lead a responsible and sustainable business."
Shares in BAT closed up 1.6% to 2,969.00 pence each in London on Tuesday. In Johannesburg, it rose 1.7% to ZAR675.51.
By Greg Rosenvinge, Alliance News reporter
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