Ericsson pays over USD 1 bln to resolve bribery charges in the US

Ericsson has agreed to pay USD 520.6 million and USD 458.4 million (plus pre-judgement interest of USD 81.5 million) to settle bribery charges brought by the US Department of Justice (DoJ) and Securities and Exchange Commission (SEC), for a total of over USD 1 billion. CEO Borje Ekholm said the Ericsson can move forward and build a stronger company. 

After a long investigation into the matter, the DoJ found Ericsson guilty of violating the Foreign Corrupt Practices Act (FCPA) in five countries, including China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam. The DoJ said that it will defer the prosecution of the charges and have them dismissed if Ericsson complies with the agreed upon three-year Deferred Prosecution Agreement (DPA). As part of the resolution, Ericsson's Egyptian subsidiary has entered a guilty plea to the bribery charge in Djibouti. 

The SEC brought civil charges against Ericsson for bribery and violating the FCPA. The company has here also agreed to get monitored for three years, and to significantly reform its Ethics & Compliance programme. The company noted that it has since 2016 conducted a comprehensive review of its anti-corruption programme, together with external expert advisors, and that it will use this review to improve the programme. 

Ericsson reiterated that the USD 1.2 billion provision it took in the third quarter will be enough to cover the fines, and that the resolutions end all FCPA investigation. The company explained that the resolutions, for the same violations, related to breaches ending in the first quarter of 2017, when employees acted in “bad faith” and “knowingly failed to implement sufficient controls.  They were able to enter into transactions for illegitimate purposes and, together with people under their influence, used sophisticated schemes in order to hide their wrongdoing,” Ericsson said. 

The US Attorney for the Southern District of New York Geoffrey Berman said the corrupt scheme started in 2000 and that the company used slush funds, bribes, gifts and grafts to conduct its telecom business, the BBC reported.