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US DOJ: Ericsson breached deal over its Iraq corruption probe

US DOJ: Ericsson breached deal over its Iraq corruption probe
US DOJ: Ericsson breached deal over its Iraq corruption probe

US Department of Justice has reportedly told Swedish telecom giant Ericsson that it has breached a 2019 agreement by withholding information regarding possible payments to the militant group Islamic State in Iraq.

Ericsson has announced that US prosecutors have concluded that the firm’s disclosure in an internal investigation over its corruption in Iraq is ‘insufficient’.

The news comes after British news broadcaster BBC had reported that the probe found the company insisting on contractors to work in IS territory, resulting in their kidnapping by the militant group.

While CEO, Börje Ekholm, did not comment about his discussions on the breach with US authorities, he insisted that the question about financing armed factions cannot be validated.

Following its announcement, Ericsson’s shares fell by 10%.

After having agreed on paying over $1 billion in penalties over allegations of corruption in China, Djibouti, Indonesia, Vietnam, and Kuwait in 2019, Ericsson had entered a deferred prosecution agreement with the US DOJ.

As per the agreement, the telecoms firm agreed on continuing to cooperate with American authorities during any ongoing prosecutions and investigations.

An internal investigation into the activities of the company’s employees, suppliers, and vendors in Iraq found evidence of corruption-related misconduct from 2011 to 2019.

Ekholm admitted the same last month after he received queries over a copy of the inquiry’s report that the International Consortium of International Journalists had obtained and later shared with 30 media partners, including BBC News Arabic.

Investigators had found the insistence that Ericsson contractors remained working in the IS-held territory while putting their lives at risk as the militants had subsequently taken them hostage.

Ericsson said that the US DOJ has established that the company breached the DPA by not making subsequent disclosure concerning the investigation after post-agreement, adding that it is in contact with the US authorities regarding the circumstances and facts about the breach determination.

It also said that it is committed to cooperating with the authorities to resolve the issue and that the investigation has not identified any of its employees being directly involved in financing terrorist organizations.

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Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for and a few other distinguished news platforms, pertaining to business and finance.