E-Malt.com News article: Vietnam: ThaiBev’s Vietnamese subsidiary fined for selling beer to North Korea

ThaiBev’s Vietnamese subsidiary is fined US$860,000 by US authorities for breaching US sanctions, Asia Brewers Network reported on October 28.

The Vietnam Beverage Company Limited (VBCL) has agreed to pay a US$860,000 fine to settle alleged violations of US sanctions, according to the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC). VBCL is a subsidiary of ThaiBev, and is a majority shareholder in Sabeco, Vietnam’s largest brewer and producer of Saigon Special, Saigon Lager, Beer 333 and Lac Viet Beer.

According to the OFAC, VBCL allegedly generated more than US$1 million in sales from beer and spirits exports to North Korea. Between January 2016 and September 2018, the company allegedly issued nearly 50 invoices to North Korean-owned entities. Payments were then made in US dollars through third-party intermediaries based in Hong Kong, China, Turkey, Singapore and the Seychelles.

The transactions triggered sanctions violations under U.S. law, as financial dealings with North Korea are tightly restricted.

Despite the seriousness of the infractions, VBCL avoided a much higher penalty. Initially, the OFAC indicated that the company could have faced fines exceeding US$16 million. However, the final penalty was reduced due to several mitigating factors, including VBCL’s voluntary cooperation, improvements in compliance procedures, and changes in management.

The US Treasury highlighted that VBCL’s case underscores the importance of robust compliance frameworks, particularly for firms operating internationally and engaging with jurisdictions under U.S. sanctions. Companies must ensure that even indirect transactions do not involve sanctioned entities, especially when payments are routed through U.S. financial systems.

VBCL has since taken steps to address gaps in its compliance structure following the investigation, according to the OFAC’s findings.


30 October, 2024