Ericsson has announced it has set aside SEK 2.3 billion, or the equivalent of US$220 million, to be used in relation to what it described as a “potential resolution” with the U.S. Department of Justice (DOJ) over alleged breaches under its 2019 Deferred Prosecution Agreement.
According to an article that appeared last week on Telecoms.com, the funds are in relation to a “potential resolution of allegations that it breached the terms of a US$1 billion settlement reached with U.S. authorities in 2019.
“That settlement was called the Deferred Prosecution Agreement (DPA), and related to corruption charges concerning Ericsson’s conduct in China, Djibouti, Indonesia, Kuwait, and Vietnam between 2011 and 2019. As well as a US$1 billion pay-off, Ericsson also agreed to a three-year period of compliance monitoring courtesy of the DOJ.
“However there were one or two other skeletons in the closet, most notably that Ericsson employees in Iraq may have indirectly bribed ISIS in order to retain access to certain transport routes.”
Ericsson stated in a release that its internal investigation and its cooperation with authorities in relation to the allegations in the 2019 Iraq-related internal investigation report remain open and ongoing.
“Since 2019, Ericsson has taken significant remedial measures, overseen by the board of directors,” it stated. “These include enhancing its group-wide approach to risk management and strengthening its compliance program and internal controls.
“The company agreed in December 2022 to extend its independent compliance monitorship until June 2024 to further our efforts to embed best-in-class compliance, risk management and internal controls frameworks across the organization.”
Börje Ekholm, Ericsson president and chief executive officer, said this extension is “consistent with our commitment to continuous improvement of Ericsson’s Ethics and Compliance program. We have made significant progress in changing our culture and implementing an enhanced compliance framework and system of internal controls, and we will use this additional time to ensure these improvements are ingrained in our organization, our daily interactions and the way we do business.
“We want to get this right and, to be a true industry leader, we have to conduct our business in the right way.”
Meanwhile, the company’s fourth quarter and full year 2022 results are scheduled to be released on Friday morning.