Ericsson between corruption and terrorists
For New York prosecutors, the Swedish multinational Ericsson was involved from 2000 to 2016 in a "campaign of corruption" with various countries, including Iraq in the hands of ISIS, and will now have to pay a fine of over 206 million of dollars. All the details
Guilty. This is how the Swedish multinational Ericsson declared itself for having violated the anti-corruption provisions of the Foreign Corrupt Practices Act (FCPA) of 2019.
The group operating in 180 countries in the supply of communication technologies and services, software and ICT infrastructures, according to the New York federal prosecutors, was involved from 2000 to 2016 in a "campaign of corruption" with government officials from various countries , including Iraq led by the self-proclaimed Islamic State (ISIS).
He will pay a fine of more than $206 million, after having already paid $520.6 million in 2019 and another $540 million to the Securities and Exchange Commission (Sec).
RETURN TO THE PAST
According to some confidential documents revealed by the Guardian in February 2022, Ericsson would have been involved in cases of corruption in at least 10 countries on 4 continents and would have paid bribes to the self-styled Islamic caliphate to be able to continue working in Iraq even after the seizure of power by of Isis.
Last year, as Start wrote, Borje Ekholm, CEO of the company, had declared that these latest "payments" – defined as "unusual expenses dating back to 2018" – could have been made "to gain access to certain transport routes " in the country.
CORRUPTION NUMBERS
According to Quartz , Ericsson paid tens of millions of dollars to agents and consultants in China (of which “at least a portion was used to supply goods of value, including leisure travel and entertainment, to foreign officials”); $2.1 million in bribes to high-level government officials in Djibouti; $4.8 million to Vietnam; 45 million to Indonesia and $450,000 to Kuwait.
THE SANCTIONS
So, in 2019, to resolve the issue, Ericsson had entered into a Deferred Prosecution Agreement (Dpa), a kind of non-prosecution agreement, with the United States Department of Justice.
The company had paid a $520.6 million fine for what, according to New York federal prosecutors, was a "year-long campaign of corruption" involving government officials and resulting in the falsification of books and records Djibouti, China, Vietnam, Indonesia and Kuwait. Ericsson also paid about $540 million to the SEC.
DPA VIOLATION
However, the wolf is losing its fur but not its vice and the Stockholm-based telco violated the 2019 DPA by “failing to truthfully disclose all information and factual evidence relating to the Djibouti scheme, the China scheme and other other potential violations of the FCPA's anti-corruption or accounting provisions”.
According to the Department , Ericsson "has not reported and promptly disclosed" even "evidence and allegations of conduct related to its business activities in Iraq that could constitute a violation of the FCPA", whose "failure to communicate prevented the United States from report certain individuals and to undertake fundamental investigative actions”.
THE VERDICT OF THE DEPARTMENT OF JUSTICE
All reasons that last Thursday led the Department to report that Ericsson "agreed to plead guilty and to pay a criminal penalty of more than 206 million dollars".
The Swedish company "will plead guilty to a long-running scheme to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes, falsifying books and records and failing to implement reasonable internal accounting controls in several countries around the world," it said. in the Department's statement .
US Attorney Damian Williams said: “Ericsson has committed significant violations of the FCPA and has entered into an agreement with the Justice Department to clean up its actions. The company's breach of its dpa obligations indicates that Ericsson has not learned its lesson and is now facing a steep price for its continued missteps.
The telco will also have to serve a period of probation until June 2024 and has agreed to a one-year extension of the independent compliance review.
REPENT REPENT?
Now for the CEO of Ericsson, Ekholm, the case is closed. “The adoption of this provision means that the issue of violations is now resolved – he said in a press release -. […] This resolution clearly recalls the historic misconduct that led to the Dpa. We have learned from this experience and are embarking on an important journey to transform our culture. To be a true industry leader, we need to be a leader in the market and in technology, but also in the way we do business."
The company also wanted to clarify that an internal investigation "did not conclude that the company made or was responsible for payments to terrorist organizations" and that even "a subsequent investigation conducted in 2022 did not change this assessment".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ericsson-tra-corruzione-e-terroristi/ on Mon, 06 Mar 2023 10:00:11 +0000.