Ericsson to pay $1bn to settle US corruption charges
Ericsson has reached a resolution on the investigations by the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) surrounding the company’s compliance with the US Foreign Corrupt Practices Act (FCPA).
Under the terms of the resolution, that relates to FCPA breaches in Q1 2017, Ericsson has entered into a Deferred Prosecution Agreement (DPA) with the DOJ to resolve the criminal charges relating to bribery in Djibouti. The DPA will also settle criminal charges relating to accounting in China, Djibouti, Indonesia, Kuwait and Vietnam. In relation to the changes in Djibouti, Ericsson’s Egyptian subsidiary plead guilty to bribery resulting in Ericsson paying a fine of approximately $520 million.
“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 (pictured), president and CEO, 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.”
Additionally, Ericsson has reached a resolution with the SEC on accounting violations of the FCPA in China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam as well as bribery provisions of the FCPA in Djibouti, China and Saudi Arabia. As part of this agreement, Ericsson will pay a fine of close to $458 million plus interest of $81 million.
“Ultimately we can only be successful if we have an entrenched ethics and compliance culture,” added Ronnie Leten, chair of the board of directors. “I am confident that with the significant steps already undertaken we are better equipped to execute on our strategy without compromising on our values.”
Since 2016, the company has been working with external advisors to carry out a complete review of its anti-corruption program, while also improving its ethics and compliance program, details of which can be found here.