Korean tobacco company KT&G is under investigation by the U.S. government and has yet to receive any notice of violation

South Korean cigarette company KT&G may not be able to recover the full amount of long-term advances it made to U.S. state governments while being investigated by the U.S. government. KT&G said it needed to re-evaluate its U.S. operations.


South Korea’s largest cigarette company, KT&G(Korea Cigarette Ginseng Equity), said it was under investigation by the US government and had not received any notification or punishment of violations, the Dong-A Ilbo reported on January 18.


According to media reports, KT&G has been accused of violating U.S. Health Department regulations and submitting erroneous information during the licensing and review process for cigarette products. At the same time, the media also expressed anxiety that KT&G may not be able to fully recover the 1.54 trillion won ($1.147 billion) it paid to U.S. state governments in the long run.


In response, KT&G said, “Due to the implementation of enhanced tobacco regulations on December 14, 20121, and increased competition in the market, it is necessary to re-evaluate the U.S. business.” We have issued an announcement indicating that we have received a comprehensive document submission directive from the U.S. Government “and” reported to the Board on the status of response to the U.S. Department of Justice’s (DOJ) document submission directive in our Business Reporting Announcement dated 21, 20213.”


In particular, in the business report, the holding company and KT&GUSACorporation (US subsidiary) submitted instructions by the consolidated documents of the US Department of Justice and submitted important information on the legal and regulatory compliance of tobacco products being sold locally. However, the company said it could not predict the outcome of the investigation and its impact at this time.


Concerned that long-term deposits may not be fully recovered, KT&G’s position is that they can be returned in turn.


A cigarette customer who is harmed as a result of the company’s illegal conduct can be attributed to the state’s medical fund when it is used. However, in other cases, according to the regulations, a full refund will be made after 25 years from the date of payment. However, since there were not many issues related to the company, the KT&G analysis had no problems with the refund. The refund period starts in 2025.


KT&G said We cannot confirm the details of the ongoing investigation because the U.S. Department of Justice has requested that the investigation be kept confidential.