British American Tobacco to pay out £512m to US authorities over North Korea

British American Tobacco (BAT) will pay 635 million dollars (£512 million) to US authorities after a subsidiary entered a guilty plea over historic sanctions violations linked to North Korea.

The Dunhill and Lucky Strike maker said it has agreed a settlement with the Department of Justice and the Office of Foreign Assets Control.

The US sanction breaches relate to its business activities in North Korea between 2007 and 2017.

The world’s second biggest tobacco firm said last year it had set aside £450 million to pay the fine and said its broader financial guidance has not been affected.

Chief executive Jack Bowles apologised over the misconduct.

He said: “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.

“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 programme, which encompasses sanctions, anti-bribery, anti-corruption and anti-money laundering.

“The significant steps already taken, as well as the continued refinements to the programme that will be made as part of these settlements, will leave us even better equipped to lead a responsible and sustainable business.”