The UAE US relations, which have usually seen one-sided efforts, often come under scrutiny over the Emirati behaviour towards Washington’s decisions and regulations. It recently failed again in offering similar support to Washington like it has received. While the United Arab Emirates has long ignored the US sanction on Iran, it has put the alliance under renewed questions by violating the sanctions on North Korea.
Essentra FZE Company Limited, a global supplier of tobacco products incorporated in the UAE, breached the US sanctions on North Korea by indulging in illegal international trade with the Asian country, and hence supported its rogue nuclear weapons and missile programme. The company and US officials confirmed that the company has agreed to pay a $665,000 fine to settle the allegations.
The US Department of Justice (DOJ) said in a statement that the public filing against the UAE firm is the first ever corporate enforcement action for violation of the sanctions regulations against the Pyongyang regime. The Emirati firm is just one of the many to put the UAE US relations under questions. In the past, Washington has put sanctions on multiple Emirati companies for breaching the regulations involving its long-time foe, Iran.
However, Essentra FZE will not face any criminal charges, although it entered into a deferred prosecution agreement with the Justice Department for conspiring to violate the International Emergency Economic Powers Act (IEEPA).
According to the 25-page agreement by the US prosecutors, the cigarette-filter manufacturer admitted responsibility for its criminal conduct and agreed to an effective corporate probation, pledging to fully cooperate with the DOJ. Following the probation period of three years, the count on the Emirati firm of conspiring to violate US sanctions law will be dismissed by the government.
UAE’s Essentra FZE had been using a network of front companies in China and other countries to export cigarette filters to North Korea, while carrying out deceptive practices to move money through US banks. On the other hand, the US sanctions barred American correspondent banks and overseas branches of US banks from facilitating wire transfers on behalf of customers located in North Korea.
Over a period of one year, from October 2017 to December 2018, Essentra FZE and its co-conspirators utilized front companies to conceal the North Korean connections, as well as falsified shipping records. The court filings revealed that the employees were instructed to not mention the country in contract documents, and instead use China to falsely declare as the destination of products.
The sanctions violations by the Emirati firm has put another dent on the already weakening UAE US relations. While several countries in the Gulf country have breached sanctions on Iran in the past, the violation of regulations against North Korea brought first ever DOJ corporate enforcement action.
