As highlighted in this prior post, in December 2019 Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.) resolved a net $1.06 billion Foreign Corrupt Practices Act enforcement action – the largest of all-time – concerning conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.
The DOJ prong of the enforcement action involved a one count criminal information against Ericsson subsidiary Ericsson Egypt Ltd. charging conspiracy to violate the FCPA’s anti-bribery provisions resolved through a plea agreement and a criminal information against Ericsson charging conspiracies to violate the FCPA’s anti-bribery, books and records, and internal controls provisions resolved through a deferred prosecution agreement. The DPA required Ericsson to retain an independent compliance monitor for a three year term. As a condition of resolving a parallel SEC matter, Ericsson was also required to retain a monitor for a three year period.
In October 2021, the DOJ accused Ericsson of breaching its DPA obligations. (See here).
Recently, Ericsson announced “that it has agreed with the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) to extend the term of the Company’s Independent Compliance Monitor for one year, to June 2024.”
As stated in Ericsson’s release:
“This extension will allow the company, under the monitorship, to further embed best in class governance, risk management and compliance frameworks across the organization. The Company remains committed to cooperating with the DOJ in connection with the resolution of the breach notification.”
In the release Ericsson President and CEO Börje Ekholm stated:
“This extension is consistent with our commitment to continuous improvement of Ericsson’s Ethics and Compliance program. 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. We want to get this right and, to be a true industry leader, we have to conduct our business in the right way.”
Chair of Ericsson’s Board of Directors Ronnie Leten stated:
“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. 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 a separate release, Ericsson continued to put a positive spin on the monitor extension stating:
“An extension on the time period of a monitorship has a number of benefits. First, it provides the company with extra time to ensure they can not only implement the necessary enhancements to their compliance and ethics programs, but also ensure these are ingrained throughout the whole global organisation. Second, it gives the monitor sufficient time to complete the review. Third, and most importantly for all parties, it allows sufficient time to test how adequately the day-to-day reality of business processes match up to the agreed vision and mission outlined between company and monitor. In Ericsson’s case, and even though the work with the monitor has advanced meaningfully, Ericsson welcomed an extension, which allows more time to implement and thoroughly test the new framework and ensure it is fully embedded across all its markets.”