Tuesday, 21 January 2020

Ericsson agrees to pay $1bn to resolve FCPA corruption allegations

By Chris Kelly, Total Telecom
Monday 09 December 19

The charges relate to historical FCPA breaches made by Ericsson between 2011 and 2017

Ericsson has agreed to enter into a three-year Deferred Prosecution Agreement and pay just over $1 billion in penalties to end criminal charges relating to violations of the FCPA. The US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) accused Ericsson of bribing officials in China…

Ericsson has agreed to enter into a three-year Deferred Prosecution Agreement and pay just over $1 billion in penalties to end criminal charges relating to violations of the FCPA.

The US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) accused Ericsson of bribing officials in China, Saudi Arabia and Djibouti to secure business contracts worth $427 million. Ericsson's Egyptian subsidiary pleaded guilty to the charges in Djibouti.

“I am upset by these past failings. Reaching a resolution with the US authorities allows us to close this legacy chapter. We can now move forward and build a stronger company," said Börje Ekholm, president and CEO of Ericsson.

"The settlement with the SEC and DOJ shows that we have not always met our standards in doing business the right way. This episode shows the importance of fact-based decision making and a culture that supports speaking up and confronting issues. We have worked tirelessly to implement a robust compliance program. This work will never stop,” he added.

As part of the resolution process, Ericsson will pay a fine of $520,650,432 to the Department of Justice in addition to a financial sanction of $458,380,000, and pre-judgement interest of $81,540,000 to the Securities and Exchange Commission. In total, Ericsson will pay $1.06 billion to resolve the matter, which it says is covered by provisions made in its Q3 2019 financial report.

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