Ericsson agrees to pay over US$206 million after federal DPA violations

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US Attorney announced On Thursday Swedish telecommunications company Ericsson has agreed to plead guilty to breaches and pay more than US$206 million 2019 Deferred Prosecution Agreement (“DPA”) that Ericsson had entered into agreements with the US Attorney’s Office to resolve criminal charges of bribery, counterfeiting books and other corrupt practices in several countries.

The DPA stems from multiple violations of the Foreign Corrupt Practices Act (“FCPA”), in which Ericsson used third-party agents and consultants from 2000 to 2016 to pay bribes to government officials and manage off-the-book slush funds. was appointed. in Djibouti, China, Vietnam, Indonesia and Kuwait.

As part of the DPA, Ericsson paid a criminal fine of more than US$520 million in 2019 and agreed to engage an independent compliance monitor for three years.

Assistant Attorney General Kenneth A. “While the Department offered Ericsson the opportunity to enter into a DPA to resolve its investigation of serious FCPA violations, the company agreed to comply with all provisions of that agreement,” Polite, Jr. said. While honoring that commitment, Ericsson repeatedly failed to fully cooperate and disclose evidence and allegations of misconduct in breach of the agreement.”

Some FCPA violations include:

Paid $2.1 million in bribes to high-ranking government officials in Djibouti, concealing the bribes by approving bogus invoices and entering into a fake contract with a consulting company. It also failed to disclose that the owner of the consulting company was married to a high-ranking official in the Djibouti government.

Ericsson’s subsidiaries paid approximately $31.5 million to third-party service providers in China for false contracts for services that were never executed.

Paid $4.8 million and $45 million, respectively, to Vietnam and Indonesia to create off-the-book slush funds.

– International Consortium of Investigative Journalists (ICIJ) also informed of In 2022, Ericsson reportedly “sought permission” from and paid for ISIS to continue operating in Mosul, Iraq, which at the time was controlled by the terrorist group. Ericsson said an internal investigation into the matter had not corroborated any such allegations.

US Attorney Damian Williams said, “The company’s breach of its obligations under the DPA indicates that Ericsson did not learn its lesson, and it now faces a heavy price for its continued wrong steps.” “As Ericsson’s anticipated guilty plea makes abundantly clear, the Southern District of New York will hold to account companies that fail to meet their obligations and voluntarily report their misconduct to the Department of Justice.”

But for Ericsson, the guilty plea is a “resolution” of its “non-criminal breaches” of the 2019 agreement, adding that no new illegal conduct has been alleged since the DPA and that the fine was merely the result of failing Is to provide DOJ with documents and information in a timely manner.

“Taking this step today means that the matter of violations is now settled. “This allows us to focus on executing our strategy while continuing to drive cultural transformation across the company with integrity at the center of everything we do,” said Borje Ekholm, Ericsson Chief Executive Officer.

According to Ericsson the guilty plea ends the DPA.

However, the DOJ said that as part of the fine, Ericsson is also serving a period of probation until June 2024 and has agreed to a one-year extension of independent compliance monitors.

The company said it has “significantly enhanced its compliance program and internal accounting controls” by taking several measures, including but not limited to hiring a new chief legal officer and a new head of corporate and government investigations.

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