Swedish telecommunications company Ericsson agreed with U.S. authorities on a one-year extension of its independent compliance monitorship after a second breach of its obligations under a deferred prosecution agreement (DPA) earlier this year.
The term of the monitor, required as part of settlements with the Department of Justice (DOJ) and Securities and Exchange Commission in December 2019 for violations of the Foreign Corrupt Practices Act (FCPA), will now run through June 2024, the company announced Wednesday. The monitorship was originally slated to last three years.
“This extension is consistent with our commitment to continuous improvement of Ericsson’s ethics and compliance program,” said Börje Ekholm, the company’s president and chief executive officer, in a press release. “We have made significant progress in changing our culture and implementing an enhanced compliance framework and system of internal controls, and we will use this additional time to ensure these improvements are ingrained in our organization, our daily interactions, and the way we do business.”
Ericsson in February announced it uncovered evidence of “corruption-related misconduct” that occurred in its Iraq operations between 2011 and 2019. The company said it first recognized the potential for compliance failures in the country when “unusual expense claims” dating back to 2018 triggered a review about potential breaches of its code of business ethics. An initial investigation launched in 2019 determined the code was violated.
In March, the DOJ informed Ericsson the “disclosure made by the company prior to the DPA about its internal investigation into conduct in Iraq in the period 2011 until 2019 was insufficient.” The agency determined the company breached the DPA by failing to make subsequent disclosure related to the investigation.
Later that month, Ericsson hired Scott Dresser to be its new chief legal officer and lead a sweeping review of what happened in Iraq and how disclosures to the DOJ were handled. The company said it would work with the agency regarding potential consequences stemming from the matter.
“We are dedicated to acting with integrity in everything we do and continuing to align business operations with strengthened internal controls, governance, and risk management processes,” said Ronnie Leten, chair of the Ericsson board of directors, in the company’s release. “Our work with the monitor has meaningfully advanced our ethics and compliance program, and we welcome this extension of our engagement with the monitor.”
In 2021, the DOJ alerted Ericsson it determined the company violated terms of the DPA the first time for failing to provide certain documents and factual information.
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