A cigarette filter maker has entered into the first-ever deferred prosecution agreement (DPA) with the Department of Justice (DOJ) that settles allegations the company violated the U.S. sanctions against North Korea.

As part of a three-year DPA, Essentra FZE, a United Arab Emirates (U.A.E.)-based subsidiary of London-based Essentra Plc, “admitted responsibility for its criminal conduct” and agreed to “implement rigorous internal controls and to cooperate fully with the Justice Department, including by reporting any criminal conduct by an employee,” the DOJ announced Thursday in a press release.

The company also agreed to pay a $665,112 fine to the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), twice the amount of the funds involved in the sanctions violation, according to the settlement agreement between Essentra FZE and the DOJ.

If Essentra FZE adheres to the terms of the agreement, the charges would be dropped after three years. One term of the settlement is that Essentra FZE not later attempt to deny the allegations it has admitted to, according to the agreement.

From Oct. 2017 to Dec. 2018, Essentra FZE used Chinese front companies to illegally move shipments of cigarette filters between its U.A.E. facility and a North Korean tobacco company, the DOJ said. Essentra FZE also falsified shipping records to obscure the true destination of the products. Two Essentra FZE employees involved in the scheme knew the filters were being sold to a North Korean company, the DOJ said.

As part of the scheme, Essentra “deceived banks in the U.S. and in the U.A.E. into processing transactions for a North Korean tobacco company,” the DOJ said.

“OFAC determined that Essentra FZE did not voluntarily self-disclose these apparent violations, and that these apparent violations constitute an egregious case,” OFAC wrote in its press release.

“Essentra FZE undermined the integrity of our financial system and harmed our national security by deliberately providing North Korea with coveted access to the U.S. economy,” said Acting U.S. Attorney Michael R. Sherwin of the District of Columbia in the DOJ press release. “Foreign companies transacting through the U.S. financial system or overseas branches of U.S. banks must comply with U.S. sanctions or else face punishment.”

In a statement, Essentra said that “none of the transactions were approved or known by senior management outside of the UAE, and both employees have since been exited from the business.” Once the allegations were made known, the company “cooperated fully with the DOJ and OFAC during the investigation,” the company said. In addition, Essentra has since made “voluntary disclosure” to OFAC regarding “certain transactions dating as far back as 2015.”

The company said the violations “arose as a result of isolated failures” to follow the company’s compliance program, and that it “has taken swift action to strengthen the control processes in place to ensure that such activity does not take place in the future.”

Company CEO Paul Forman added, “A very thorough and in-depth investigation has been carried out to fully understand the root cause of the issues we have seen. We have made a very significant investment of both time and money, which has now equipped us with enhanced protection against any potential future issues of this nature.”

Essentra Plc’s stock is publicly traded on the London Stock Exchange. The company employs more than 7,500 employees in 34 countries, with divisions that manufacture plastic injection-molded components, custom packaging, and cigarette filters.