Swedish telecommunication giant Ericsson has been fined $206 million and will plead guilty to violating a 2019 deal with the United States (U.S.) prosecutors, according to reports. The deal required the company to disclose information about its activities in Iraq, China and Djibouti. The agreement follows a scandal over potential payments made to Islamic State militants through the company’s Iraq activities.
Ericsson is reported to have fallen short in disclosing its activities, violating the deferred prosecution agreement (DPA) it entered in 2019 to resolve a corruption probe in Vietnam, Djibouti and China. As part of the DPA, the Department of Justice agreed not to prosecute Ericsson for three years if it paid a substantial penalty, complied with U.S. laws, implemented “rigorous internal controls”, and fully cooperated on ongoing investigations.
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However, the Justice Department stated that Ericsson breached the DPA by violating the agreement’s cooperation and disclosure provisions. While such agreement breaches have been rare in history, the Justice Department has warned a number of companies under President Joe Biden as it cracks down on corporate misconduct and repeat offenders.
The telecom company has been given a probation term through June 2024 and agreed to extend the independent compliance monitor for an additional year. In 2019, Ericsson paid a criminal penalty of over $520 million and agreed to an independent compliance monitor for three years.
