With regards to a documentary in Swedish Radio
November 23, 2016
The radio documentary refers to a period of 15-20 years ago when Ericsson used sales agents to a greater extent than today. Ericsson has, like many other companies that are active on an international market, used the services of sales agents. To engage well established and knowledgeable sales agents has been a significant competitive advantage. This approach can be attractive because it can be far more cost effective than building up a large local sales organization.
Several of the events are related to a payment system called World Wide Commission Scheme (WCS), that Ericsson took into use in 1998 to manage payments to sales agents. The system proved to be difficult to control and was therefore terminated already in 2001. The company continued to use commercial agents in a more controlled way, but nevertheless began to phase out the use of sales agents in 2008. Today there are a few remaining sales agent agreements, for example in countries where sales agents are a legal requirement.
Ericsson has repeatedly reported on the World Wide Commission Scheme (WCS). We also note that the WCS was investigated and tried in a court of law in conjunction with a case of tax evasion. The District Court (2006) and the Court of Appeal (2008) acquitted all the defendants. The court had not discovered any inaccuracies in our accounting or had objections to our business procedure related to WCS. In the documentary it is also mentioned an alleged payment to the President of Costa Rica in 1999. Now, 17 years later, Ericsson has not found any further information on this matter.
Ericsson disagrees with the claims made in the Swedish media that the company would have used bribes in a deliberate and systematic way. We cannot guarantee that individual employees have never, or will, act in violation of our Code of Business Ethics. What we can do is to make sure we always take appropriate action when we have information proving wrong-doing. Ericsson has a zero tolerance policy for corruption and bribery and take these matters seriously.