DoJ says Ericsson breached corruption-related settlement terms

The U.S. Department of Justice has notified Ericsson of a breach in its corruption-related settlement with the agency, the Swedish vendor disclosed Thursday.

In an update, Ericsson said the DoJ stated that Ericsson breached its obligations under a deferred prosecution agreement (DPA), reached roughly two years ago, “by failing to provide certain documents and factual information.”

Ericsson in 2019 paid more than $1 billion in penalties to resolve bribery and corruption investigations by the DoJ and the Securities and Exchange Commission over violations of the U.S. Foreign Corrupt Practices Act (FCPA). There was a long-running scheme, in which authorities found Ericsson had made and falsely recorded tens of millions of dollars in bribes.

RELATED: U.S. charges ex-Ericsson employee in bribery scheme

The investigations cited corrupt activities over 17 years starting in 2000 and spanning six countries outside the U.S. Ericsson admitted to conspiring with others in the scheme that involved high-level executives and using bribes, slush funds and gifts to win contracts, while falsifying books.

As part of the DPA settlement, Ericsson subsidiary Ericsson Egypt plead guilty to one-count criminal charge of conspiracy to violate the anti-bribery provisions of the FCPA.

In addition to financial penalties, Ericsson agreed to three years of compliance monitoring by a third party – which started in June 2020 – to ensure it adhered to the terms reached with U.S. authorities and after which bribery charges against the company would be dismissed.

The monitor’s main job is to review Ericsson’s compliance and evaluate progress in implementing and operating enhanced controls.

On Thursday, Ericsson said it will have the chance to respond to the DoJ in writing to explain the nature and circumstances of the DPA breach and the actions it has taken to address and fix the situation.

It didn’t provide additional details as to what kind of documents or information fell short of the DoJ terms.

“At this stage it is premature to predict the outcome of these developments. DOJ has sole discretion under the DPA to determine whether a breach occurred,” Ericsson stated. “Ericsson intends to respond to DOJ and to continue cooperating with DOJ consistent with the terms of the DPA, including requirements regarding production of documents.”

RELATED: Ericsson settles Nokia bribery-related damages claim for $97M

Aftermath of the corruption scheme has continued to play out this year. In May, Ericsson agreed to pay rival Nokia roughly $97 million to settle a damages claim related to the investigations.

A federal indictment was unsealed just last month in which the U.S. charged a former Ericsson employee for his alleged role between 2010-2014 in bribing Djibouti government officials $2.1 million so that the vendor could secure and retain business of a state-owned telecom operator.