An India-based tobacco company agreed to pay $332,500 to the Treasury Department’s Office of Foreign Assets Control (OFAC) to settle charges it violated U.S. sanctions by involving U.S. banks and bank personnel in payments for shipments to North Korea.
In 2015, Godfrey Phillips India made contact with a Thai company that offered to manage shipments of tobacco from GPI to North Korea, OFAC stated in an enforcement release Wednesday. In 2017, GPI shipped more than 174,600 pounds of tobacco through China to the Thai intermediary, which then sent the product to North Korea.
The Thai company arranged for a total of $369,228 across five payments to GPI through Hong Kong intermediaries using U.S. dollars, according to OFAC. Three of the payments were cleared by U.S. banks, while one payment was sent to an Indian branch of a U.S. bank.
As a result of these actions, GPI violated U.S. sanctions by causing U.S. persons to engage in transactions with North Korea, OFAC said.
“This action further highlights the deceptive practices [North Korean] entities use to evade U.S. and international sanctions and acquire revenue-generating goods, such as by employing intermediaries in various countries to coordinate shipping and make payments,” the regulator stated.
OFAC deemed the case “non-egregious” and considered the base penalty in the matter to be $475,000. The lower settlement amount reflected GPI’s cooperation and implementation of a sanctions compliance framework in January 2022, among other mitigating factors.
GPI did not voluntarily self-disclose the apparent violations and was faulted for “harm[ing] U.S. foreign policy objectives” by dealing with North Korea.
GPI did not respond to a request for comment.
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