Ericsson has pleaded guilty to charges relating to allegations of corruption in Iraq and paid a fine of $206,728,848 to settle the matter ( See Mobile News, January 24).
The plea and fine conclude a Department of Justice Deferred Prosecution Agreement (DPA) which Ericsson entered into in 2019 to resolve violations relating to conduct in several countries between 2010 and 2016.
The violations were connected with Ericsson employees in Iraq who allegedly paid protection money to terror groups including ISIS. The money enabled Ericsson to use unofficial roads and routes controlled by ISIS
Ericsson stated: “Since the start of the DPA, the DOJ has not alleged or charged Ericsson with any new criminal misconduct, and no new illegal conduct has been alleged or charged today.
“As previously announced in October 2021 and March 2022, however, the DOJ notified Ericsson that it had failed to provide documents and information to the DOJ in a timely manner and had not adequately reported to the DOJ information relating to a 2019 Iraq-related internal investigation.
‘Under the DPA, the DOJ has the sole discretion to determine that the Company has breached its obligations, and if it makes this determination, it has the ability to prosecute the Company for the past misconduct covered under the DPA.
‘As a result, the Company has entered a guilty plea for the FCPA violations to which it previously admitted as part of the DPA. The Company is not adjusting the long-term financial targets it has given, as it does not expect any material deviations from these.
Börje Ekholm, CEO of Ericsson, commented;
“Taking this step today means that the matter of the breaches is now resolved. This resolution is a stark reminder of the historical misconduct that led to the DPA. We have learned from that and we are on an important journey to transform our culture. We are a very different company today and have made important changes since 2017 and over 2022.”
Board chairman Ronnie Leten, commented:
“Since 2017 the Company has substantially improved its approach to risk management and compliance, including an overhaul of its Anti-Corruption Program to prevent and detect problematic conduct.
“With respect to the historical conduct in Iraq, the Company continues to thoroughly investigate the facts in full cooperation with the DOJ and the U.S. Securities and Exchange Commission. As previously disclosed, the Company’s 2019 investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization and the Company’s significant further investigation over the course of 2022 has not altered this conclusion.
The Department of Justice stated:
“Ericsson has significantly enhanced its compliance program and internal accounting controls and has committed to continuing to implement and test further enhancements. Ericsson has significantly enhanced its cooperation and information-sharing efforts.”
