Swedish network equipment giant Ericsson will fork over USD 1billion to US regulators to settle corruption charges. Ericsson agreed to pay the hefty amount after pleading guilty to violating the Foreign Corrupt Practices Act. It is in trouble for bribing officials in several countries like Kuwait, China and others over a period of 17 years. To resolve the charges, the Swedish telecommunications company has entered into an agreement for three years with the US Department of Justice. The company will pay a fine of almost USD 521 million as part of deferred prosecution agreement. After the period of three years, the charges will be dismissed.
According to admissions made by Ericsson, it failed to implement reasonable internal accounting controls. Because of which it engaged in a longstanding scheme to falsify records and books, paying bribes. Ericsson has admitted to paying bribe to government official in China, Indonesia, Vietnam, Djibouti, and Kuwait. The company used consultants and third party agents to bribe government officials. Ericsson said that the bribery campaign ran for longest period in China, for entire 17 years. Ericsson subsidiaries provided millions of dollars for gifts, entertainment, and travel expenses of foreign officials. The US Department of Justice presented a long list of wrongdoing by Ericsson subsidiaries. The money was spent to in order to be ahead of state-owned subsidiaries.
Ericsson will also pay almost USD 540 million to Securities and Exchange Commission. The money will be paid for violating the bribery and accounting provisions of the FCPA. Steve Peikin, co-director of the SEC Enforcement Division, said that Ericsson was engaged in a terrible bribery scheme for years. According to the SEC, Ericsson bribed officials in Saudi Arabia, Djibouti and China to allegedly obtain business valued USD 427 million. The investigation in alleged bribing cases took place separately. While the SEC began its investigation in 2013, the DoJ joined it in 2015. The combined value of fine imposed by the SEC and DoJ are valued at around USD 1 billion.