On December 6, 2019, Ericsson entered into a Deferred Prosecution Agreement (DPA) with the United States Department of Justice (DOJ). On March 1, 2022, the DOJ informed Ericsson that the disclosure made by the company before the DPA regarding its internal investigation into conduct in Iraq from 2011 to 2019 was insufficient. Further, he determined that the company breached the DPA by failing to make a subsequent disclosure related to the post-DPA investigation. Company is in communication with the DOJ regarding the facts and circumstances of the determination of the violation and agrees to cooperate with the DOJ in resolving the issue.
At this point, it is premature to predict the outcome of this case.
Comments on the investigation in Iraq
Based on our current review, we believe that the situation described in the media about the conduct of Ericsson employees, vendors and suppliers in Iraq, dating back to 2011, is covered by Ericsson’s 2019 internal investigation.
As previously stated in our February 15, 2022 press release, Ericsson has invested significant time and resources in understanding these issues. The investments we have made in our ethics and compliance program have enabled us to identify and investigate misconduct in Iraq. The 2019 investigation, which was supported by outside legal counsel, conducted over a year and involved the collection and review of a large amount of information, revealed serious breaches of compliance rules and the Code of Business Ethics.
The investigation could not identify whether an Ericsson employee was directly involved in the financing of terrorist organizations. Based on our current assessment of media reports, we do not believe they alter this conclusion. We reiterate our commitment to investigate and take steps to address any new information, including further investigation, if warranted.
As a result of the investigation, several employees were fired from the company and several other disciplinary and other corrective actions were taken. This included reducing gaps in our internal processes in the region and incorporating lessons learned from the investigation into our ethics and compliance program. In addition, Ericsson terminated a number of third-party relationships and prioritized operations in Iraq to improve training and awareness activities, policies and procedures, and third-party management processes.
The Company has previously publicly acknowledged that it did not have sufficient internal controls in place, including internal controls designed to deter and detect corruption. Over the past few years, Ericsson has made significant investments in compliance, which has enabled the company to uncover and correct past wrongdoings. Since early 2017, when we began our business turnaround, we have invested heavily in improved compliance systems and processes. We work hard to build a better Ericsson focused on safeguarding a strong ethical and compliant culture across the business. We continue to invest significant resources to improve our ethics and compliance program and our speaking-up culture to help prevent future misconduct.
Ericsson is under compliance monitoring and the Deferred Prosecution Agreement with the US Department of Justice remains in effect.
MORE INFORMATION AT:
Peter Nyquist, Head of Investor Relations
Telephone: +46 705 75 29 06
Stella Medlicott, Senior Vice President, Marketing and Corporate Relations
Telephone: +46 730 95 65 39
Telephone: +46 10 719 69 92
This is information that Telefonaktiebolaget LM Ericsson is required to make public under the EU Market Abuse Regulation. The information was submitted for publication, through the contact person listed above, at 05:45 CET on March 2, 2022.