You can find our press release in the Latest News section of our website. Given the complexity of these matters, we have compiled the below Q&A with further information to answer questions frequently raised by our stakeholders.
Why did you plead guilty and what charges did Ericsson plead guilty to?
- In 2019, Ericsson entered into a U.S. DOJ Deferred Prosecution Agreement (DPA) to resolve Foreign Corrupt Practices Act (FCPA) violations relating to conduct in Djibouti, China, Vietnam, Indonesia and Kuwait that took place pre-2017. Charges were filed in 2019 but the prosecution was deferred, under the DPA.
- The 2019 agreement provided that, in the event of a future breach of its DPA obligations, the DOJ in its sole discretion could prosecute the parent Company for the FCPA violations covered by the 2019 DPA.
- The DOJ determined that the company’s failure to provide DOJ with certain documents and information in a timely or adequate manner constituted breaches of the DPA.
- As a result, the Company is pleading guilty to the old, previously charged FCPA violations relating to conduct in Djibouti, China, Vietnam, Indonesia and Kuwait that took place pre-2017.
What does today’s announcement mean?
- Today, Ericsson announced that it has reached a resolution with the U.S. Department of Justice (DOJ) regarding non-criminal breaches of its 2019 Deferred Prosecution Agreement (DPA).
- Under the agreement, and as provided by the DPA, LM Ericsson will enter a guilty plea regarding previously deferred charges relating to old conduct, all prior to 2017.
- In addition, Ericsson has agreed to pay a fine of $206,728,848.
In December of last year, Ericsson announced that it had agreed with DOJ and SEC to extend the term of monitor for one year, to June 2024 to further embed best in class compliance and internal controls frameworks across the organization. - The entry of the plea agreement will bring the 2019 DPA to an end.
The plea agreement provides that Ericsson will have cooperation, reporting and compliance obligations to the DOJ through June 2024.
Does today’s agreement resolve the ongoing Iraq investigation? If not, how long will the Iraq investigation take to complete?
- No. With respect to historical conduct in Iraq, the Company continues to thoroughly investigate the facts in full cooperation with the DOJ and the U.S. Securities and Exchange Commission.
- As previously disclosed, the Company’s 2019 investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization, and the Company’s significant further investigation over the course of 2022 has not altered this conclusion.
- We don’t have a timeline for completion of this investigation.
What is Ericsson doing to improve its compliance and governance?
- We are dedicated to acting with integrity in everything we do and continue to strengthen our approach to risk management, compliance and internal controls, including improvements to our Anti-Corruption Compliance Program to prevent and detect problematic conduct.
- The Company has strengthened its leadership team by appointing a new Chief Legal Officer and Head of Group Function Legal Affairs & Compliance and a new Head of Corporate & Government Investigations, and has substantially increased the resources in Compliance, Corporate & Government Investigations and other assurance functions, including by adding headcount, to drive ethics and compliance in the business.
- We are reviewing governance, ethics and compliance across the organization, and are making enhancements, including expanded risk assessments to address country specific compliance risks. Our goal is to ensure that material risks are effectively identified, thoroughly assessed, transparently discussed, appropriately escalated and promptly addressed.
- The Company continues to invest in transactional controls and analytics, providing employees and business partners with tools and information that empower them to make fact-based, integrity-driven decisions.
- We have significantly improved and continue to tighten our vetting and oversight of third parties with whom we work, to choose parties who will meet our ethics and compliance expectations.
- Since the entry into the DPA, Ericsson has engaged an independent compliance monitor approved by the DOJ to evaluate the Company’s progress in implementing and operating its enhanced compliance program and accompanying controls as well as providing recommendations for improvements.
In December of last year, Ericsson announced that it had agreed with DOJ and SEC to extend the term of monitor for one year, to June 2024 to further embed best in class compliance and internal controls frameworks across the organization.