US Government Hands Down $860,000 Fine to Beer Company Accused of North Korean Business Dealings

(Photo: Saigon Beer)

A Vietnamese alcohol company has been fined $860,000 by the Office of Foreign Assets Control for engaging in business with North Korea through American financial institutions.

On Friday, OFAC unsealed a report that accused Vietnam Beverage Company Limited of generating over $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 U.S. dollars through third-party intermediaries based in Hong Kong, China, Turkey, Singapore and the Seychelles.

Vietnam Beverage Co. is owned by Thai billionaire Charoen Sirivadhanabhakdi. In 2017, the company acquired a controlling stake in Sabeco Brewery, known for popular brands including Saigon Special, Saigon Lager, Beer 333 and Lac Viet Beer. Sabeco, the largest beer manufacturer in Vietnam by volume, generates over $1 billion per year in revenue.

Officials did not disclose which of Vietnam Beverage Co.’s brands were being exported to North Korea.

The issue reportedly came to a head when executives self-reported the dealings to the U.S. government. The export of goods, services and technology to North Korea has largely been illegal since as early as the 1950s.

“When the Subsidiaries’ senior management underwent organizational changes in December 2019, the new management team learned of the Subsidiaries’ past sales of alcoholic beverages to North Korea and ordered the termination of any further dealings with North Korea by the Subsidiaries. VBCL also proactively submitted a letter to OFAC providing additional information regarding the conduct at issue,” the filing states.

The company faced a maximum fine of $1.7 million per violation. Due to its ongoing cooperation with authorities and lack of prior penalties, Vietnam Beverage Co. has been ordered to pay $860,000.

Company owner Charoen Sirivadhanabhakdi is the third-richest person in Thailand. In addition to being the country’s largest property developer and landlord, he owns over 50 hotels dotted throughout Asia, the U.S., the U.K. and Australia.

Sirivadhanabhakdi also controls the supermarket chain Big C Supercenter and beverage producer ThaiBev. His net worth is conservatively valued at around $10 billion.