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In Connection With 2019 Ericsson Enforcement Action, DOJ Criminally Charges Former Ericsson Employee

Bereket

As highlighted in this prior post, in late 2019 Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.) resolved a $1.06 billion net FCPA enforcement action concerning conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.

Regarding Djibouti, the enforcement action alleged that Ericsson (through certain subsidiaries and agents) provided approximately $2,100,000 in bribe payments to, and for the benefit of, foreign officials in Djibouti, including a high-ranking government official in the executive branch of the Djibouti government who had influence over decisions made by a state-owned telecommunications company and the CEO of the state-owned telecom company, in order to secure an improper advantage in order to obtain and retain business with the Telecom Company and to win a contract valued at approximately €20,300,000 with the Telecom Company.”

In connection with this prong of the Ericsson enforcement action, the DOJ announced yesterday that Afework “Affe” Bereket (pictured – a dual citizen of Ethiopia and Sweden) was criminally charged with one count of conspiracy to violate the FCPA’s anti-bribery provisions and one count of conspiracy to commit money laundering “for his alleged role in a scheme to pay approximately $2.1 million in bribes to high-level government officials in the Republic of Djibouti and conspiring to launder funds to promote the scheme.”

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Issues To Consider From The Ericsson Enforcement Action

Issues

This previous post went in-depth into the Ericsson enforcement action and this post continues the analysis by highlighting additional issues to consider.

Record-Setting

Although there are certain haphazard FCPA top ten lists out there, the Ericsson enforcement action is the largest in FCPA history in terms of actual FCPA settlement amount. (See here for the current top ten list).

Record-Setting?

Even though the Ericsson enforcement action was record-setting, the question arises should it have been record-setting or was it an example of FCPA settlements increasing just because (see here for the prior post)?

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Swedish Company Bribes Foreign Officials, U.S. Collects $1.06 Billion In Record-Setting FCPA Enforcement Action

ericsson

Late last Friday, the DOJ and SEC announced (here and here) a record-setting Foreign Corrupt Practices Act action Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.). The $1.06 billion settlement amount is the largest net FCPA settlement amount in history surpassing the $850 million FCPA enforcement action against Russian telecom company MTS in March 2019 (see here).

The enforcement action concerned conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.

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