BAT Investigated for Sanctions Busting

British American Tobacco (BAT) is under investigation by the U.S. Department of Justice (DOJ) and the Office of Foreign Assets Control (OFAC) over suspected sanctions-busting. Britain’s Serious Fraud Office (SFO) is conducting a separate investigation relating to “suspicions of corruption in the conduct of business by group companies and associated persons.”

BAT has operations in several countries that are subject to sanctions, including Iran and Cuba. In its 2019 annual report, the company acknowledged that operations in these countries expose the company to the risk of “significant financial cost.”

BAT said that it is cooperating with the investigation.

“As the investigations are ongoing, it would be inappropriate for us to provide further comment at this time,” BAT spokeswoman Anna Vickerstaff said.

Shares in the company fell 5.5 percent after The Times first reported the news on Tuesday

Financial services company Jefferies suspects the U.S. investigations may be linked to the SFO investigation. “If we are right, and it (the U.S. probe) does relate to the same accusations (as in SFO probe), the fact this has been ongoing in some form since 2017 with no apparent conclusion, we would not worry too much about it for now,” Jefferies analyst Owen Bennett wrote.