Operatives used ISIS-controlled routes to avoid customs inspections
Ericsson has uncovered a massive corruption ring in its Iraq network operations.
The corruption involved using illegal transport routes run by terror groups such as ISIS.
Suspicions of irregularities began with ‘unusual’ expense claims in Iraq, dating back to 2018. This triggered a review that uncovered compliance concerns about breaches of Ericsson’s Code of Business Ethics.
These led to a detailed internal investigation three years ago by Ericsson in 2019, supported by external legal counsel.
Ericsson has sacked several employees and terminated third-party relationships following the corruption investigation for activities between 2011 to 2019.
Ericsson’s Government and Corporate Investigations team found serious breaches of compliance rules and the Code of Business Ethics and identified corruption-related misconduct.
These included donations without a clear beneficiary, paying a supplier for work without a defined scope and documentation, cash payments to suppliers, funding inappropriate travel and expenses and improper use of sales agents and consultants.
There were violations of Ericsson’s internal financial controls; conflicts of interest. non-compliance with tax laws. and obstruction of the investigation.
Payments to intermediaries were identified. The use of transport routes that circumvented Iraqi Customs and were controlled by terrorist organisations including ISIS were discovered.
But, the ultimate recipients of these payments could not be tracked. Payment schemes and cash transactions linked to money laundering were also identified.
Ericsson has now prioritised its Iraq business for “enhanced training and awareness activities, policies and procedures, and third-party management processes”.
Ericsson has been in Iraq since the lifting of a UN embargo led to the reopening of the telecoms equipment market.
Since then, Ericsson has continued its work in the country, including during periods of civil unrest
In a statement, Ericsson said: “We may not have found all the underlying facts. Ericsson takes any allegation of impropriety extremely seriously and welcomes any new facts brought to light as a result. We are committed to responsibly conducting business, applying ethical standards in anti-corruption, humanitarian and human rights terms.”