On July 16, 2020, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the settlement of apparent violations of the North Korea Sanctions Regulations by Essentra FZE Company Limited (Essentra), a global supplier of cigarette products located in the United Arab Emirates. In addition, in exchange for a deferred prosecution agreement with the U.S. Department of Justice (DOJ) and the payment of a fine of $665,112, Essentra admitted to violations related to North Korean sanctions.
Among the allegations against Essentra were that in early 2018, a senior manager and an employee were introduced to a North Korean national during a business meeting. During this meeting, the parties discussed Essentra’s ability to produce specific cigarette products for exportation to North Korea. Although these representatives of the company knew at all times that the products would be shipped to North Korea, it received and executed documents that identified front company counterparties in China. Essentra’s manufacturing and exportation of the products to North Korea resulted in three wire transfers to pay for the goods, one in U.S. dollars that transited the United States and two in another currency that were deposited into Essentra’s accounts at the foreign branch of a U.S. bank between September 2018 and December 2018.
Several points stand out about this settlement: