e.l.f. Beauty settled on $1 million for breaching North Korea Sanctions –...

e.l.f. Beauty settled on $1 million for breaching North Korea Sanctions – Avoided possible fine of $40 million

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e.l.f. Beauty, Inc., by agreeing to pay a settlement amount of just under $1 million, has succeeded to avoid a $40 million penalty.

According to the U.S. Office of Foreign Assets Control (OFAC), the cosmetics company imported 156 shipments of false eyelash kits from UN-sanctioned North Korea. The company imported the eyelash kits from two of the Chinese suppliers from April 1, 2012 to Jan. 28, 2017, and originally it was the Chinese suppliers who were sourcing the materials of those kits from North Korea and the amount involved in the purchase of such kits valued at $4.43 million.

And now, in order to settle the civil liability case for those156 apparent violations of the North Korea Sanctions Regulations which otherwise could have been slapping the company with fines of amounting $40 million for the breaches it made over a time period of five years, e.l.f. Beauty has agreed to pay $996,080.

It was an internal audit in 2017, which the company is in practice to conduct routinely, it came to the knowledge of the company for the first time that two of its third-party suppliers were being utilizing some of the material to be used in false eyelash kits from the Democratic People’s Republic of Korea, said Tarang Amin, CEO of e.l.f. Beauty, in a statement to CNBC. He also noted that the facts about the origin of those materials were not known to the company previously.

OFAC, a part of U.S. Treasury Department, in its statement also agreed to the company’s stance of not being aware of North Korean origin of material. The OFAC noted that the proportion of the amount involved in the violating shipments did not come to be significant as it comprise less than 1 percent of the company’s revenue at the time and also the company itself made the breaches known.

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I cover technology, utilities and biotechnology for Markets Morning, and I help out occasionally with other industry sectors. I've written about investment and personal finance topics for more than 20 years from a lowly copywriter to editor-in-chief, so I've done a little bit of everything. For what it's worth, I have a BA from Duke University and an MBA from Rollins College. I'm married with one daughter, and that's worth more than everything else put together.

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