Ericsson Accused of Bribery and Slush Fund, Faces Another $270 Billion Fine from US Government

Violation of 2019 US Prosecutor Deferred Prosecution Agreement

Swedish telecommunications equipment company Ericsson has been fined $206.7 million (approximately 270 billion KRW) for violating the terms of a deferred prosecution agreement with the U.S. government related to a 2019 corruption and bribery case.

According to the Wall Street Journal, CNBC, and others on the 2nd (local time), Ericsson was investigated by the U.S. government for creating slush funds and paying bribes in foreign countries such as China, Vietnam, and Indonesia in 2019. Ericsson admitted to the charges and agreed to pay $1.06 billion (approximately 1.3 trillion KRW) in fines and penalties to the U.S. government, leading the U.S. prosecutors to issue a deferred prosecution decision.

Subsequently, allegations arose that Ericsson had contact with the Islamic extremist armed group Islamic State (ISIS). It was reported that Ericsson sought permission from the group to conduct business in Iraq, which was under ISIS control at the time.

The U.S. Department of Justice stated that Ericsson failed to provide information related to the charges in China and other countries and did not properly report activities in Iraq that could potentially violate the Foreign Corrupt Practices Act (FCPA). This constituted a breach of the agreement, resulting in Ericsson being ordered to pay $206.7 million.

Damian Williams, the U.S. Attorney for the Southern District of New York, said, "Ericsson seriously violated the FCPA and agreed to undertake remedial measures and settle. However, Ericsson’s violation of the obligations under the deferred prosecution agreement shows it has not learned its lesson, and now it must pay a steep price for its mistakes."

In response, Ericsson emphasized that it was not charged with any new illegal acts and that the issue arose because it did not provide relevant information to the U.S. Department of Justice in a timely manner.