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Tag: North Korea

  • Arrest in North Korea Smuggling Case

    Arrest in North Korea Smuggling Case

    Photo: Taco Tuinstra

    A Chinese man who was arrested in Australia is awaiting extradition to the United States for allegedly selling counterfeit cigarettes in a North Korean scheme to generate revenue, according to Reuters.

    “The individual is wanted to face prosecution in the United States for a number of sanctions, band fraud, money laundering and conspiracy offenses,” said a spokesperson for Australia’s Attorney-General’s Department. Jin Guanghua was arrested in Victoria and remains in custody.

    According to an unsealed U.S. indictment, Jin, who is a Chinese citizen, allegedly committed bank fraud in an illegal scheme by North Korea to generate revenue through the purchase and sale of tobacco. The indictment stated that the North Korean banks used front companies to avoid U.N. sanctions.

    According to the U.S. Federal Bureau of Investigation, Jin was one of three Chinese nationals acting as middlemen to purchase tobacco for companies owned by the North Korean government and military. The tobacco, which was purchased from international suppliers and shipped to Dalian, China, before being smuggled to North Korea, was used to manufacture counterfeit cigarettes to generate hard currency.

    Jin was involved between 2009 and 2019, according to the indictment, and remains in custody “pursuant to the United States of America’s request for his extradition to face criminal charges in the United States.” A warrant for his arrest was executed in August, according to a spokesperson from a Victorian magistrates court.

    Globally, North Korea is one of the largest producers of contraband cigarettes.

  • ‘BAT North Korea Trade Was Legal in Singapore’

    ‘BAT North Korea Trade Was Legal in Singapore’

    Image: Andy

    British American Tobacco’s Singaporean affiliate did not break local laws when it sold cigarette components to North Korea, despite receiving a multi-million dollar fine in the U.S. for flouting North Korean sanctions, reports The Straits Times.

    In April, BAT and its indirect subsidiary in Singapore agreed to pay U.S. authorities $635.24 million plus interest to resolve investigations into suspicions of sanctions breaches concerning business activities relating to the Democratic People’s Republic of Korea between 2007 and 2017.

    North Korea is subject to sanctions by the United Nations and individual countries for developing nuclear weapons, money laundering and human rights violations, among other activities.

    According to the Straits Times, Singapore authorities became aware in 2018 that BAT Marketing Singapore was involved in selling cigarette components to the Democratic People’s Republic of Korea (DPRK), but stopped sales since June 2017—five months before Singapore implemented the UN sanctions.

    The authorities concluded that the company did not breach Singapore’s UN regulations. “The trade of cigarette components with the DPRK was not prohibited under our laws at that time,” the city’s police were quoted as saying by the Straits Times.

    Today, trade sanctions against North Korea make it a crime for anyone in Singapore, as well as Singapore citizens based overseas, to supply, sell or transfer designated export items to anyone in North Korea, whether directly or indirectly.

    Those found guilty of doing so can be fined up to SGD100,000 ($75,473) or three times the value of the goods that were dealt with, whichever is greater. They can also be jailed for up to two years or both. 

  • BAT Settles Investigation

    BAT Settles Investigation

    Image: alexlmx

    BAT has reached an agreement with the U.S. Department of Justice (DOJ) and the Office of Foreign Assets Control (OFAC) to resolve investigations into suspicions of sanctions breaches concerning business activities relating to the Democratic People’s Republic of Korea between 2007 and 2017.

    BAT has entered into a deferred prosecution agreement with the DOJ and a civil settlement agreement with the OFAC, and an indirect BAT subsidiary in Singapore has entered into a plea agreement with the DOJ. The total amount payable to the U.S. authorities is $635.24 million plus interest.

    Under the agreement, BAT cannot comment on the documentation published by the investigating authorities or on related factual matters.

    As announced in its half-year report of 27 July 2022, BAT recognized a provision of £450 million ($540 million) in line with the International Accounting Standards 37 requirements. its full year 2023 group guidance is unaffected by this announcement.

    “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 BAT CEO Jack Bowles in a statement.” 

    “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 program, which encompasses sanctions, anti-bribery, anti-corruption and anti-money laundering. The significant steps already taken, as well as the continued refinements to the program that will be made as part of these settlements, will leave us even better equipped to lead a responsible and sustainable business.”