Swedish telecom giant Ericsson said Wednesday it reserved around $1.2 billion to resolve an expected FCPA enforcement action by the DOJ and SEC.
The Stockholm-based LM Ericsson Telephone Company said it was cooperating with the DOJ and SEC regarding possible FCPA violations in China, Djibouti, Indonesia, Kuwait, Saudi Arabia, and Vietnam.
Ericsson said the breaches were the result of several deficiencies, including a failure to react to red flags and inadequate internal controls which allowed employees to actively circumvent internal controls.
The settlement provision will “impact the third quarter 2019 results,” the company said Wednesday.
“We have to recognize that the Company has failed in the past and I can assure you that we work hard every day to build a stronger Ericsson, where ethics and compliance are cornerstones in how we conduct business. “ President and CEO Börje Ekholm said.
Ericsson first disclosed the investigation in a company statement on June 17, 2016, when it received “a voluntary request” from U.S. authorities, according to data from FCPA Tracker.
In March, Russia’s biggest mobile phone company, MTS, paid $850 million in penalties to the DOJ and SEC to resolve FCPA violations.
Last year, Sweden’s Telia paid $965 million in total penalties to resolve FCPA offenses in Uzbekistan. The penalties were paid to enforcement agencies in the United States, Sweden, and the Netherlands.
In 2016, Amsterdam-based VimpelCom reached a $795 million FCPA resolution with the DOJ and SEC. Some of the penalties went to Dutch enforcement authorities.
Harry Cassin is the publisher and editor of the FCPA Blog.