U.S. company pays $1M, materials from North Korea - KPMG United States
Share with your friends

U.S. company pays $1 million penalty, imports from China included materials from North Korea

U.S. company pays $1M, materials from North Korea

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) today announced a settlement agreement with a California company that agreed to pay almost $1 million for “apparent violations” of the North Korea sanctions regulations.


Related content

According to an OFAC release [PDF 106 KB], the company agreed to pay a civil monetary penalty of $996,080 to resolve its potential civil liability for 156 apparent violations of the North Korea sanctions regulations for imports of false eyelash kits from two suppliers located in China that contained materials sourced by these suppliers from North Korea. The eyelash kits were imported during a period from 2012 to 2017, and the total value of the imports was just over $4.4 million.

During the period at issue, the company’s OFAC compliance program was “either non-existent or inadequate.” The company’s production review efforts focused on quality assurance issues pertaining to the production process, raw materials, and end-products of the goods it purchased and/or imported. Until January 2017, the company’s compliance program and its supplier audits failed to discover that approximately 80% of the false eyelash kits supplied by two of the China-based suppliers contained materials from North Korea. 

The company voluntarily self-disclosed the apparent violations, and OFAC determined that the apparent violations constituted a non-egregious case.

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner, Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

Andy Siciliano
Partner, National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Irina Vaysfeld
T: 212-872-2973
E: ivaysfeld@kpmg.com

Robert Waldrop
T: 212-954-8117 
E: rwaldrop@kpmg.com

Christopher Young
T: 312-665-3229
E: christopheryoung@kpmg.com

George Zaharatos
T: 404-222-329
2E: gzaharatos@kpmg.com

John L. McLoughlin
Principal, East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Luis (Lou) Abad
Principal, WNT
T: 212-954-3094
E: labad@kpmg.com

Amie Ahanchian
Managing Director
T: 202-533-3247
E: aahanchian@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


Request for proposal