ELF Cosmetics managed to bat away more than $40m in penalties after reporting its breach of sanctions to authorities

A California cosmetics company has agreed to pay a nearly US$1m fine for importing fake eyelashes containing materials from North Korea in breach of sanctions, the US treasury has announced.

Between 2012 and 2017 the company imported “156 shipments of false eyelash kits from two suppliers located in the People’s Republic of China that contained materials sourced by these suppliers” from North Korea, said a treasury statement.

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“ELF’s compliance programme and its supplier audits failed to discover that approximately 80% of the false eyelash kits supplied by two of ELF’s China-based suppliers contained materials” from North Korea, it said.

The company faced more than $40m in penalties but the treasury took into account mitigating circumstances including the small amount involved and the fact that ELF reported the violation of sanctions, which were imposed on Pyongyang over its nuclear and ballistic missile programmes.

“This enforcement action highlights the risks for companies that do not conduct full-spectrum supply chain due diligence when sourcing products from overseas, particularly in a region in which [North Korea] as well as other comprehensively sanctioned countries or regions, is known to export goods,” the treasury said.