Ericsson to Pay About $207 Million After DOJ Finds It Breached Deal

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Ericsson

AB has agreed to pay $206.7 million in a foreign bribery settlement with the U.S. Justice Department, which found the telecommunications company had breached an earlier deal.

Stockholm-based Ericsson will plead guilty to the original charges it faced following its breach of a 2019 deferred prosecution agreement, the Justice Department said Thursday. 

Ericsson in 2019 agreed to pay more than $1 billion, including a criminal penalty, to resolve U.S. agencies’ investigations into a bribery scheme that ran from 2000 to 2016 and involved the company’s operations in Djibouti, China, Vietnam, Kuwait and Indonesia. The company entered into a deferred-prosecution agreement with prosecutors requiring it to retain a compliance monitor for three years and to cooperate in related probes.

In a deferred prosecution agreement, prosecutors charge a company but agree that they will drop those charges after a period of time if the company abides by certain conditions. The Justice Department can effectively rip up a DPA and go ahead with the prosecution if it finds the company has broken its promises, though that power is seldom exercised.

Ericsson, though, failed to fully disclose factual information and evidence related to schemes in Djibouti and China, the department said Thursday. Ericsson also failed to report evidence related to activities in Iraq that might constitute a violation of the Foreign Corrupt Practices Act, the department said. The failures prevented the Justice Department from bringing charges against certain individuals, it said.

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“Ericsson engaged in significant FCPA violations and made an agreement with the Department of Justice to clean up its act,” said

Damian Williams,

U.S. attorney for the Southern District of New York. “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.”

The company has also agreed to a one-year extension of the monitor’s term. The company said the new settlement resolves the matter of its breaches.

“This resolution is a stark reminder of the historical misconduct that led to the DPA,” Ericsson Chief Executive

Börje Ekholm

said in a statement. “We have learned from that and we are on an important journey to transform our culture.”

Ericsson said it is continuing to cooperate with the Justice Department and Securities and Exchange Commission as they conduct an investigation into its operations in Iraq. The company in 2022 said it had uncovered “serious breaches of compliance rules” in its Iraq business.

Write to Richard Vanderford at Richard.Vanderford@wsj.com

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