Ericsson worked with ISIS as Huawei and ZTE faced


20m | Alan Burkitt-Gray

Ericsson broke the rules in Iraq for an eight-year period over the past decade – just as the US said Huawei and ZTE were selling equipment to Iran, against US sanctions.

The Swedish company admitted that a 2019 internal investigation revealed “unusual expense claims in Iraq dating back to 2018”.

These covered “the conduct of Ericsson employees, vendors and suppliers in Iraq during the period 2011-2019,” Ericsson said in a statement.

CEO Börje Ekholm (pictured) told the Swedish business newspaper Dagens Industry“What we see is that transportation routes have been purchased through areas that have been controlled by terrorist organizations, including ISIS.”

Ericsson said the investigation “uncovered serious breaches of compliance rules and the code of business ethics. It identified evidence of corruption-related misconduct.

A particularly damning paragraph in Ericsson’s statement, released last night, reads: “The investigation team also identified payments to middlemen and the use of alternative transport routes in connection with the circumvention of Iraqi customs. , at a time when terrorist organizations, including the IS, controlled certain means of transport. routes. »

Company investigators “could not determine the ultimate recipients of these payments. Payment patterns and cash transactions that could create a risk of money laundering were also identified.

Observers will be quick to point out the similarities to the US case against Chinese rivals Huawei and ZTE – although in those cases the sellers are dealing with a legal government of Iran, not a terrorist organization.

The U.S. case against ZTE dates back to 2012, when the FBI in the United States began investigating allegations that the company was smuggling telecommunications equipment, including U.S.-sourced hardware and software, to Iran in violation of US sanctions.

In 2018, the US Department of Commerce (DoC) fined ZTE $1.4 billion and appointed a lawyer to monitor it, to ensure it was not smuggling to Iran and other embargoed countries.

But during ZTE’s investigation, the US leaked documents that appeared to show Huawei had done similar things, through a holding company called Skycom.

This culminated in the 2018 arrest of Huawei chief financial officer Meng Wanzhou at Vancouver airport in Canada. The US wanted to extradite her to face charges, which she strenuously denied, of lying to HSBC bank in Hong Kong about her relationship with Skycom.

Meng was finally released last year after an out-of-court settlement.

Now it appears, by Ericsson’s own admission, that his operatives were at the same time involved in ISIS, also known as Islamic State, ISIL or Daesh, which at one point held about 40% of the ‘Iraq.

The company said last night: ‘The investigation did not identify that an Ericsson employee was directly involved in the financing of terrorist organisations’, but added: ‘Following the investigation, several employees were fired from the company and several other disciplinary and other corrective actions were taken.”

In addition, “Ericsson has terminated a number of third-party relationships and has prioritized Iraqi Country activities to improve training and awareness activities, policies and procedures, and third-party management processes.”

Ericsson said it “continues to work with outside counsel to review the findings and corrective actions resulting from the 2019 investigation to identify any further action the company should take.”


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