DOJ: ERICSSON BROKE DEAL OVER IRAQ CORRUPTION CLAIMS, SAY US PROSECUTORS
The US Department of Justice (“DOJ”) informed the Swedish telecom group, Ericsson, that its disclosure about the company’s internal investigation into conduct in Iraq prior to the Deferred Prosecution Agreement (DPA) was not sufficient. The DOJ determined that Ericsson breached the DPA by failing to make sufficient subsequent disclosure.
All these facts arise after an investigation conducted by the International Consortium of Investigative Journalists (ICIJ) that revealed how Ericsson allegedly paid bribes to Islamic State terrorists to continue selling its services in Iraq after the terrorist group took control of parts of the country.
On a press release dated March 02, 2022, Ericsson pointed it has invested “significant time and resources” to investigate, identify and stop the misconduct in Iraq and since 2019, as one of the results of the investigation, several employees were exited from the company and disciplinary and remedial actions were taken. The press release also informs that Ericsson has made investments in compliance systems and processes to build and safeguard “a strong ethical and compliant culture throughout the entire company.” After the release, Ericsson US-listed shares dropped more than 14% in premarket trading.
However, it is not the first time the DOJ has pointed a breach of a DPA. According to US prosecutors, even though the company has admitted to pay millions of dollars in corrupt payments to secure contracts in five countries, including Iraq, it has failed to provide certain documents and information on its actions after 2019 (when the deal was signed). In October, 2021, the DOJ informed Ericsson that it had breached its obligations by not providing enough disclosure.
A DPA is an agreement between an investigated party and the DOJ to avoid a court action by providing all relevant information about its alleged wrongdoing to the agency, frequently followed by some sanctions, as the amount of $1 billion dollars in fines imposed on Ericsson.
See press release from Ericsson: https://www.ericsson.com/en/press-releases/2022/3/update-on-deferred-prosecution-agreement