A major legal action has been launched against British American Tobacco (BAT), one of the globe's leading tobacco corporations, alongside a subsidiary, by hundreds of US military service members, civilians, and their families. The lawsuit, filed for unspecified damages, accuses BAT of illicitly assisting North Korea in funding terrorism over many years, with weapons allegedly used against Americans in the Middle East.
Historical Business Activities Under Scrutiny
The controversy centres on BAT's joint venture established in 2001 with a North Korean company to manufacture cigarettes within the country. Despite a 2005 Guardian investigation revealing the venture's continuation, and US government warnings about North Korea's terrorism funding leading to sanctions, BAT publicly claimed to end operations in 2007. However, the US justice department stated in 2023 that the company secretly maintained its activities through a subsidiary.
Financial Transactions and Legal Settlements
According to Matthew Olsen, a former justice department official, BAT's North Korea venture facilitated approximately $418 million in banking transactions, generating revenue that advanced North Korea's weapons programme. In 2023, BAT entered a deferred prosecution agreement, with the subsidiary pleading guilty, resulting in a $629 million fine for conspiring to violate sanctions and commit bank fraud.
Jack Bowles, then BAT's chief executive, expressed regret in a statement, acknowledging the company fell short of expected standards. He emphasised that rigorous compliance and ethics, including sanctions and anti-money laundering measures, remain a top priority, with ongoing refinements to ensure responsible business conduct.
Civil Lawsuit Seeks Compensation for Victims
The civil lawsuit, filed under a federal law allowing victims to sue third parties aiding terrorism, argues that BAT should be liable for damages. It alleges North Korea used profits from the cigarette venture and smuggling to fund weapons of mass destruction for Iran's revolutionary guard and Hezbollah, used in attacks such as those on 8 January 2020 at al-Asad and Erbil airbases in Iraq, and a 2022 missile strike in Kurdistan.
Ryan Sparacino, a lawyer representing the plaintiffs, stated the case shows a clear link between BAT's clandestine scheme and the weapons deployed in deadly terrorist attacks. The lawsuit details over 100 soldiers diagnosed with traumatic brain injuries and more than a dozen fatalities, with many others injured.
Plaintiffs and Allegations of Knowledge
Plaintiffs include around 200 service members with injuries like traumatic brain injuries and post-traumatic stress disorder, along with family members affected by the attacks. The lawsuit claims BAT knew or recklessly disregarded that its joint venture financed missile and rocket attacks by funding North Korean terrorist fronts, persisting for at least a decade despite warnings.
Raj Parekh, another lawyer for the plaintiffs, highlighted the enduring harm of terrorist violence and the pursuit of justice for American service members and civilians, seeking accountability for alleged enabling conduct.
Legal Context and Precedents
This case follows a 2023 US Supreme Court ruling that victims of a 2017 Islamic State attack could not claim damages from social media companies without proof of conscious assistance in terrorism. Additionally, a recent federal appellate court revived a lawsuit against pharmaceutical companies accused of funding terrorism in Iraq, underscoring ongoing legal battles over corporate liability.
The suit against BAT contends the company was aware its funds supported terrorism, citing public statements, reports, and internal monitoring of US government and media alerts on terrorist finance risks linked to the illicit cigarette trade.
