South Korean tobacco company KT&G is under investigation by the US Department of Justice (DOJ) and the Food and Drug Administration (FDA).
KT&G faces allegations of submitting falsified and intentionally misleading information during the U.S. approval process for one of its cigarette products.
On February 15, Tobacco Insider, an organization specializing in tobacco industry research and investigations, reported that the DOJ and FDA are investigating KT&G for allegedly omitting information about harmful substances in its U.S.-marketed cigarettes, such as ‘Timeless Time’ and ‘Carnival’. “The DOJ has ordered KT&G to submit documents related to the products in question, though no sanctions have yet been imposed.”
The main accusation against KT&G involves the omission of information about harmful substances, including ‘diacetyl’ and ‘levulinic acid’, from the data submitted to the FDA regarding their cigarettes.
KT&G’s business report from March of the previous year also mentions this issue, which said “KT&G USA is being investigated by the Department of Justice, which has ordered the submission of documents concerning the regulatory compliance of tobacco products sold in the U.S. The report states that the outcome and impact are currently unpredictable.”
Tobacco Insider notes that KT&G temporarily ceased its U.S. cigarette tobacco operations in December 2021, attributing the pause to “intensified regulations and heightened competition.”
Experts see that KT&G might not be able to reclaim its long-term deposits. Tobacco Insider highlighted worries that the company could face fines, jeopardizing the recovery of $1.15 billion in long-term deposits due to penalties.
Tobacco companies make long-term deposits to the US government, which are returned after 25 years unless required for compensation due to the products causing significant harm to smokers. Given the investigation’s focus on tobacco substances harmful to human health, KT&G’s ability to reclaim the deposit will depend on the investigation’s outcome.
The Korea Daily attempted to contact KT&G USA for comments on February 20 but did not receive a response.
BY YEOL JANG, HOONSIK WOO [jang.yeol@koreadaily.com]
