US authorities settle bank fraud and sanctions allegations with Indonesian paper manufacturer

On January 14, 2021, PT Bukit Muria Jaya, an Indonesian manufacturer of cigarette papers and packaging, entered into an eighteen-month deferred prosecution agreement with the US Department of Justice, which filed a criminal information charging the company with one count of conspiracy to commit bank fraud, in violation of 18 USC  § 1349.  At the same time, the company agreed to settle its potential civil liability for apparent sanctions violations with the Office of Foreign Assets Control of the US Department of the Treasury.

In the statement of facts appended to the DPA, Bukit Muria admits to allowing front companies rather than North Korean customers to pay for products, and to shipping products to entities outside of North Korea in order to  mislead correspondent banks in the US concerning the nature of the  transactions.  As a result, the banks processed transactions that they would not have processed, had they known that the front companies were operating on behalf of North Korean entities.  These transactions were approved by non-executive employees of Bukit Muria.  The DOJ determined that the company stopped conducting transactions involving North Korean customers in May 2018, when it learned that US sanctions applied to the transactions.

The DOJ will defer prosecution for a period of eighteen months, provided that the company complies with the terms of the DPA, which include continued cooperation with the investigation, and the implementation of a sanctions compliance program designed to prevent and detect violations of US sanctions laws.  As part of its compliance efforts, Bukit Muria has committed not to undertake US dollar transactions and currency conversions that transit the US on behalf of blocked persons or on behalf of the governments of North Korea, Iran or Syria.  The company has also undertaken to administer global sanctions training for relevant employees, and to provide semi-annual compliance reports to OFAC and the DOJ for the duration of the DPA.  In addition, the company will pay a fine of $1,561,570, which, when paid, will satisfy the civil money penalty of $1,016,000 imposed by OFAC in connection with the same transactions.

DOJ press release | DPA | Criminal information 

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