Hundreds of US military service members, civilians and their families have filed a lawsuit for unspecified damages against British American Tobacco (BAT), one of the world’s largest tobacco companies, and a subsidiary, claiming the company spent years illicitly helping North Korea fund terrorism weapons that were used against Americans.
BAT formed a joint venture in 2001 with a North Korean company to manufacture cigarettes in the country. The venture quietly continued, a 2005 Guardian investigation revealed, even as the US government publicly warned North Korea was funding terrorism and imposed sanctions on the country. Amid mounting international pressure in 2007, the company claimed it was ending business in North Korea, but secretly continued its operation through a subsidiary, the US justice department said in 2023. BAT’s venture in North Korea provided about $418m in banking transactions, “generating revenue used to advance North Korea’s weapons program”, Matthew Olsen, then the justice department official in charge of its national security division, said during a 2023 Senate hearing.
In 2023, BAT entered into a deferred prosecution agreement and along with the subsidiary, which pleaded guilty, agreed to pay the US $629m in fines for conspiring to violate sanctions and bank fraud.
“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,” Jack Bowles, then the company’s chief executive, said in a statement at the time. “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.”
The civil lawsuit filed on Thursday seeks compensation under a federal law that allows victims of terrorist attacks to not only sue the organization allegedly responsible for damages, but also any third parties said to have aided and abetted, or conspired to assist, in an act of terrorism.
“This case alleges a clear nexus between BAT’s clandestine scheme in North Korea and the weapons used in deadly terrorist attacks,” said Ryan Sparacino, a lawyer at Sparacino PLLC who is representing the plaintiffs.
The lawsuit argues BAT should be liable for damages because North Korea used profits from the cigarette venture and cigarette smuggling to fund the development of weapons of mass destruction for Iran’s revolutionary guard and Hezbollah. The complaint says those weapons were used in attacks on 8 January 2020 on the al-Asad airbase and Erbil airbase in Iraq and a 2022 missile attack in Kurdistan. More than 100 soldiers were diagnosed with traumatic brain injuries in the 8 January 2020 attack and more than a dozen people were killed. Many more were injured in the 2022 attack in Kurdistan.
“The devastating harm caused by terrorist violence does not fade with time – families carry it every day,” said Raj Parekh, the former acting US attorney for the eastern district of Virginia and a partner at Sparacino PLLC who is also representing the plaintiffs in the case. “This case is about pursuing justice for American service members, civilians, and their loved ones, and about seeking accountability for conduct that allegedly enabled the terrorist attacks against them.”
“We do not comment on potential or pending legal claims,” a BAT spokesperson said.
The plaintiffs include about 200 service members who suffered a range of injuries from the attacks, including traumatic brain injuries and post-traumatic stress disorder. Also included among them is the widow and the estate of a man killed while assisting refugees during the 2022 attack in Kurdistan. Several family members who also say they suffered harm from the attacks are plaintiffs as well.
“Defendants knew – or recklessly disregarded – that by operating an illicit joint venture with a North Korean state-owned tobacco company, they were financing the missile and rocket attacks carried out by the IRGC and Hizballah against Americans,” says the lawsuit, which was filed in federal court in the eastern district of Virginia. “For at least a decade, Defendants persisted in this scheme, funneling hundreds of millions of dollars to North Korean terrorist fronts financing missiles used to attack Americans, including Plaintiffs, and defying repeated warnings that their conduct would enable these attacks.”
In 2023, the US supreme court unanimously ruled that victims of a 2017 Islamic State attack were not entitled to damages from Facebook, Twitter, and Google. The plaintiffs argued the companies were liable for damages because they knew IS was using their platforms for recruitment and did not do enough to stop it. The supreme court said that inaction was not enough – the plaintiffs had to show that the companies “consciously and culpably” assisted in the terror act to make it succeed.
Last week, a federal appellate court in the District of Columbia revived a lawsuit seeking damages against pharmaceutical companies who are alleged to have funded terrorism in Iraq by paying bribes to a Hezbollah-controlled militia to win contracts at the ministry of health. The companies deny wrongdoing.
The suit against BAT argues the company knew its money was funding terrorism and continued the venture anyway. It points to numerous public statements, as well as public and private reports. The company was also aware of reports and public statements detailing North Korea’s support for terrorism, the suit alleges.
“Its in-house personnel closely monitored US government and media reports, and its own corporate filings confirm it was acutely aware of the terrorist finance risks presented by the illicit cigarette trade,” the complaint says.
