Ericsson to pay DoJ $206.7m over bribery scandal


The penalty comes as a result of having breached their Deferred Prosecution Agreement (DPA) with the Department of Justice (DoJ) from back in 2019

This week, Swedish mobile network equipment vendor Ericsson has announced that it will pay the US DoJ the sum of $206.7 million, settling a legal battle related to a highly publicised bribery scandal.

Back in 2019, following an investigation, the DoJ and the Securities and Exchange Commission (SEC) accused Ericsson of having bribed officials in China, Djibouti, Indonesia, Kuwait, Saudi Arabia, and Vietnam during the period between 2010 and 2016.

To resolve this conflict, Ericsson signed a DPA with the DoJ, agreeing to pay the US government $1.06 billion to settle the matter.

However, last year, Ericsson announced that an internal investigation had revealed the company may have made bribery payments to the Islamic State terrorist group in Iraq, dating back to 2011.

This revelation, as well as further questions about Ericsson’s activities in Djibouti and China, led the DoJ to accuse the vendor of violating the terms of its DPA.

“When the Department afforded Ericsson the opportunity to enter into a DPA to resolve an investigation into serious FCPA violations, the company agreed to comply with all provisions of that agreement,” said Assistant Attorney General Kenneth Polite. “Instead of honoring that commitment, Ericsson repeatedly failed to fully cooperate and failed to disclose evidence and allegations of misconduct in breach of the agreement.”

As a result, this week Ericsson is once again being forced to pay its way out of trouble, settling this latest clash by agreeing to a settlement with the government worth $206.7 million.

The company had been expecting a fine of some sort from the DoJ for some time, having set aside around $220 million in its budget to cover this expense back in January.

“Taking this step today means that the matter of the breaches is now resolved. This allows us to focus on executing our strategy while driving continued cultural change across the company with integrity at the centre of everything we do,” explained Ericsson CEO Borje Ekholm.

In related news, Ericsson recently revealed that it would cut around 8,500 jobs globally as part of efforts to cut costs and streamline its operations. Around 1,400 of these roles will be in the vendor’s home market of Sweden.

The company is currently seeking to reduce its costs by around $880 million by the end of 2023.

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