Stockholm. Swedish telecoms group Ericsson will pay a $206 million fine to US justice to close an alleged Islamic State bribery scandal in Iraq.
Payment of the fine will serve the Swedish group to close its December 2019 transactional agreement with the North American Justice System.
At that time, under the agreement, the Swedish group agreed to pay a fine of one billion dollars for corruption in five other countries (Djibouti, China, Vietnam, Indonesia and Kuwait).
The fine now announced is due to the fact that Ericsson failed to provide the US justice system – whose global jurisdiction in several areas allows it to act against foreign groups – with the conclusions of an internal investigation relating to the alleged bribery.
This investigation reported on suspicious payments made between 2011 and 2019 to facilitate ground transportation in areas controlled by the Islamic State.
The money would have ended up in the pocket of the extremist group, at the time when it controlled part of Iraqi territory.
“On numerous occasions, Ericsson has not fully cooperated with and failed to disclose evidence and allegations of misconduct, in violation of the 2019 agreement,” the US Attorney General said in a statement.
“Companies should know that we will closely scrutinize compliance with all terms of corporate resolution agreements, and that there will be serious consequences for those who do not comply with their obligations,” US Justice added.
Last month, Ericsson already made $220 million in advance for this fine.
“This ruling is a sobering reminder of the historic malpractices that led to the settlement. We’ve learned our lesson” and we’ll “transform our culture” as a company, Ericsson president Bori Ekholm said in a statement Thursday night. .
And the Swedish group had announced, on Tuesday, the departure of Lori Wadi, head of the ethics and legal compliance department, without referring to the Iraqi issue.
Ekholm himself has previously admitted that some of his employees may have paid bribes.
In parallel with the agreement with the US courts, the Iraqi case is being investigated in Sweden, at a sensitive moment for Ericsson on a business level.
The group, which will employ 105,000 people worldwide in 2022, last week announced 8,500 job cuts.
Ericsson reported disappointing results for the full year in 2022, on the back of a slowing global economy and inflation.
The Swedish group is locked in a tough battle internationally with Chinese company Huawei and Finland’s Nokia to build 5G networks.
The segment is one of the few in the tech world without a heavyweight in North America, as Lucent was acquired by Alcatel, which was in turn absorbed by Nokia in late 2016.
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