Washington accuses Ericsson of having broken the agreement on corruption in Iraq


The Swedish telecommunications equipment giant Ericsson is in turmoil. The latter said on Wednesday that he had been informed by the American authorities of the launch of proceedings against him following the publication of information reporting numerous acts of corruption and fraud in his activities in Iraq.

If the US Department of Justice had concluded a deferred prosecution agreement with Ericsson, it was canceled by Washington, which does not intend to let the case pass. “The U.S. Department of Justice has determined that the company violated its deferred prosecution agreement by failing to make subsequent disclosures related to the investigation,” Ericsson management said.

The blame for Ericsson relates to payments made to move equipment through areas controlled by the Islamic State (IS) and the insistence of its contractors to continue working in areas controlled by ISIS, which has led to their abduction. The reports all claim to be based on a leaked internal Ericsson investigation into its activities in Iraq, of which the International Consortium of Investigative Journalists says it has 73 of the 79 pages.

Proven corruption

In February, Ericsson acknowledged that its internal investigation revealed serious breaches of compliance rules and breaches of ethics, but did not publish the contents.

“The investigation identified evidence of corruption-related misconduct, including: making a monetary donation without a clear recipient; paying a vendor for work without a defined scope and without documentation; using vendors to make cash payments; funding inappropriate travel and expenses; and inappropriate use of commercial agents and consultants,” confirmed the management of the Scandinavian giant. “In addition, the investigation found violations of Ericsson’s internal financial controls, conflicts of interest, non-compliance with tax laws and obstruction of the investigation.”

“The investigative team also identified payments to middlemen and the use of alternative transport routes as part of the circumvention of Iraqi customs, at a time when terrorist organizations, including ISIS, controlled certain routes. transportation.” Investigators were unable to determine the ultimate recipients of these payments. Payment systems and cash transactions that potentially created a money laundering risk were also identified.”

“We will correct this in the future”

The company did not provide the identities of employees suspected of having participated directly in the financing of a terrorist organization, even if several employees left the company following this internal report.

Speaking to reporters on Wednesday, Ericsson Chairman and CEO Borje Ekholm wished to make amends by saying the company would remedy its mistakes. “I think the reality here is that we discovered this ourselves in 2018, and investigated in 2019. There are parts that can be substantiated and parts that can’t,” he said. he declared.

“The issue of funding […] cannot be substantiated. What can be substantiated are several violations of our Code of Business Ethics, allegations of conflict of interest, as well as other types of misconduct. This includes, for example, payments or donations for which we cannot find the final recipient, and there are a number of them, which is extremely embarrassing in itself,” the Ericsson boss said. Ericsson accused the media of focusing on doing business in volatile areas where corruption and terrorists exist.

“Don’t get me wrong, these facts are unacceptable. We will correct this in the future,” said Borje Ekholm.

Source: ZDNet.com





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