British American Tobacco is to pay $635m (£512m) plus interest to US authorities after a subsidiary admitted selling cigarettes to North Korea in violation of sanctions.
US authorities said the settlement affected BAT activity in North Korea between 2007 and 2017.
BAT chief Jack Bowles said “we deeply regret the misconduct”.
The United States has imposed severe sanctions on North Korea for its nuclear and ballistic missile activities.
Tuesday’s settlement was reached between BAT and the US Department of Justice (DOJ) and the Treasury Department’s Office of Foreign Assets Control.
BAT is one of the largest multinational tobacco companies in the world and one of the 10 largest companies in the UK. It owns major cigarette brands including Lucky Strike, Dunhill and Pall Mall.
In a statement, BAT said it has entered into a “deferred prosecution agreement with the DOJ and a civil settlement agreement with OFAC, and an indirect subsidiary of BAT in Singapore has entered into a plea agreement with the DOJ.”
The DOJ said BAT also conspired to defraud financial institutions into processing transactions on behalf of North Korean entities.
North Korean leader Kim Jong Un is known to be a heavy smoker. Last year, the United States tried to get the UN Security Council to ban tobacco exports to North Korea, but it was vetoed by Russia and the China.
In a Tuesday briefing, DOJ Assistant Attorney General Matthew Olsen said the settlement was “the culmination of a lengthy investigation,” describing it as “the biggest North Korean sanction in the history of the Ministry of Justice”.
He said BAT was engaged in an “elaborate scheme to circumvent US sanctions and sell tobacco products to North Korea” through subsidiaries.
“Between 2007 and 2017, these third-party companies sold tobacco products to North Korea and received approximately $428 million.”
Criminal charges have also emerged against North Korean banker Sim Hyon-Sop, 39, and Chinese facilitators Qin Guoming, 60, and Han Linlin, 41, for facilitating the sale of tobacco to North Korea. .
A $5million (£4.4million) bounty was paid for information leading to Mr Sim’s arrest or conviction, and $500,000 (£402,905) rewards for each of the other two suspects.
They were accused of buying leaf tobacco for North Korean state-owned cigarette makers and falsifying documents to trick US banks into processing transactions worth $74 million . North Korean manufacturers, including one belonging to the military, earned around $700 million from these deals.
Pyongyang has for years faced several rounds of harsh sanctions in response to its ballistic missile launches and nuclear tests.
However, this has not deterred Mr. Kim from continuing to expand the country’s weapons program.