The Department of Justice reports that a global supplier of cigarette paper products has agreed to pay a fine of $1.56 million and enter into a deferred prosecution agreement for conspiring to commit bank fraud in connection with the shipment of products to North Korean customers. The company has also (1) agreed to implement a compliance program designed to prevent and detect violations of U.S. sanctions laws and regulations and regularly report on the implementation of that program, (2) committed to report violations of relevant U.S. laws to the DOJ and to cooperate in the investigation of such offenses, and (3) entered into a settlement agreement with the Office of Foreign Assets Control.
According to a DOJ press release, the company admitted in part that it sold products to two North Korean companies as well as a Chinese trading company while knowing that those products were destined for North Korea. After learning that one of its North Korean customers was having difficulty executing payments, company personnel agreed to accept payments from third parties that were otherwise unrelated to the transactions. This evaded the sanctions monitoring and compliance systems of U.S. banks, inducing them into executing prohibited transactions.
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