BRITISH AMERICAN TOBACCO-DPRK CASE COULD MEAN SERIOUS PRISON TIME FOR AMERICAN COMPLIANCE OFFICERS AND ACCOUNT REPRESENTATIVES

While the agreement between British American Tobacco (BAT), and the United States, involving the payment of hundreds of millions of dollars in fines and penalties, is not receiving significant attention in the American compliance community, there is one aspect which will eventually demand the attention: The failure of the US banks to exercise effective enhanced due diligence in their correspondent accounts could result in Federal prison sentences of up to 30 years, for those who permitted 310 transactions which resulted in massive international North Korea sanctions violations.

Apparently, those American compliance officers and account representatives did not appreciate the strict US policy of enforcement of DPRK sanctions, and the fact that American bankers involved in this extraordinary amount that benefitted North Korea will be held to account for their negligence. there are rumors that compliance officers will be indicted for willful blindness, and they should be taken seriously.

While in the past, regulators and US Attorneys have routinely imposed civil penalties solely upon the offending banks, in this instance, where a point must be made to the American compliance community that examples must be made for North Korean violations, to serve as an effective deterrent of others. We trust that the compliance officers involved have already retained the services of competent defense counsel.