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Ericsson agrees to pay over $1 billion to resolve U.S. corruption probes

Ericsson agrees to pay over $1 billion to resolve U.S. corruption probes

Saturday, December 07, 2019, 09:55 GMT+7
Ericsson agrees to pay over $1 billion to resolve U.S. corruption probes
An Ericsson logo is pictured at Mobile World Congress (MWC) in Shanghai, China June 28, 2019. Photo: Reuters

Swedish mobile telecoms company Ericsson has agreed to pay over US$1 billion to resolve probes into corruption, including the bribing of government officials, the U.S. Department of Justice said on Friday.

The bribery took place over many years in countries including China, Vietnam, and Djibouti, the department said.

The total charges include a criminal penalty of more than $520 million, plus $540 million to be paid to the U.S. Securities and Exchange Commission (SEC) in a related matter.

The company admitted it had conspired with others to violate the Foreign Corrupt Practices Act (FCPA) from at least 2000 to 2016 by engaging in a scheme to pay bribes and to falsify books and records and by failing to implement reasonable internal accounting controls, the Justice Department said in a statement.

“The settlement with the SEC and DOJ shows that we have not always met our standards in doing business the right way,” Ericsson CEO Borje Ekholm said in a statement.

Ericsson used third parties to pay bribes to government officials to secure and keep business, authorities said.

Consultants were retained to create slush funds and transfer money to third parties, according to one of the complaints.

One of the company’s subsidiaries, Ericsson Egypt Ltd, pleaded guilty in the Southern District of New York to a charge of conspiracy to violate the anti-bribery provisions of the FCPA.

Pleading guilty can bring additional severe sanctions, including the revoking of licenses, but the company can negotiate waivers to ensure they can continue to operate.

“Through slush funds, bribes, gifts, and graft, Ericsson conducted telecom business with the guiding principle that ‘money talks,’” U.S. Attorney Geoffrey Berman of the Southern District of New York said in a statement.

Ericsson said it had reviewed its anti-corruption program and taken measures to improve its ethics and compliance.

It has said previously it was cooperating with U.S. authorities and that it would make a $1.2 billion provision in relation to the probes.

Reuters

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