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Ericsson pays $206 million to settle FCPA DPA breaches

Swedish telecom Ericsson agreed Thursday to pay $206 million to settle charges that it violated its deferred prosecution agreement that was part of the $1 billion settlement in 2019 related to global FCPA violations.

According to the DOJ, Ericsson breached the DPA by failing to “truthfully disclose all factual information and evidence” related to the Djibouti scheme, the China scheme, and other potential violations of the FCPA’s anti-bribery or accounting provisions.

Ericsson also failed to promptly report and disclose evidence and allegations of conduct related to its business activities in Iraq that may constitute a violation of the FCPA, the DOJ said.

Ericsson will pay an additional criminal penalty of $206.7 million to settle the DPA breach.

Ericsson also agreed Thursday to plead guilty to the original charges deferred by the 2019 DPA: one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the internal controls and books and records provisions of the FCPA.

“The entry of the plea agreement will bring the 2019 DPA to an end,” Ericsson said in a statement Thursday.

The DOJ said Thursday’s action also includes eliminating any cooperation credit originally awarded pursuant to the DPA.

In 2019, Ericsson agreed to pay the DOJ and SEC over $1 billion in one of the biggest Foreign Corrupt Practices Act enforcement actions ever.

The company created slush funds that it used to bribe officials via intermediaries in Djibouti, China, Vietnam, Indonesia, and Kuwait.

In the 2019 enforcement action, Ericsson paid the DOJ a criminal penalty of over $520 million, and an Ericsson subsidiary from Egypt pleaded guilty to criminal charges in federal court in New York. Ericsson paid $540 million to the SEC in disgorgement and interest.

The DOJ’s Brian Benczkowski said then that Ericsson’s corruption “involved high-level executives and spanned 17 years and at least five countries, all in a misguided effort to increase profits.”

Under Thursday’s plea agreement, Ericsson will also be required to serve a term of probation through June 2024 and has agreed to a one-year extension of the independent compliance monitor.

“The company’s breach of its obligations under the DPA indicate that Ericsson did not learn its lesson, and it is now facing a steep price for its continued missteps,” U.S. Attorney Damian Williams said Thursday.

In March 2022, the company said the DOJ had notified it that it had breached the DPA by “failing to make subsequent disclosure related to the investigation post-DPA.”

In June 2022, the SEC informed Ericsson that it opened an investigation concerning matters described in the Company’s 2019 Iraq investigation report, according to data from FCPA Tracker.

In a statement Thursday, Ericsson said “the DOJ has not alleged or charged Ericsson with any new criminal misconduct, and no new illegal conduct has been alleged or charged today.”

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