In December 2019, Swedish telecom company Ericsson resolved a net $1.06 billion Foreign Corrupt Practices Act enforcement action. The enforcement action concerned conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.
As to Djibouti, the DOJ alleged that various Ericsson employees “conspired and agreed with others to corruptly provide approximately $2,100,000 in bribe payments to, and for the benefit of, foreign officials in Djibouti, including Foreign Official 1 (described 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), Foreign Official 2 (similarly described), and Foreign Official 3 (described as the CEO of the state-owned telecom company), in order to secure an improper advantage in order to obtain and retain business with Telecom Company and to win a contract valued at approximately €20,300,000 with Telecom Company (the “Telecom Company Contract”).”
Earlier this week, four former Ericsson executives were acquitted in Sweden concerning the same core conduct related to Djibouti. (See here and here for media coverage).
This is interesting.
What makes the Swedish acquittals all the more interesting is that one of the defendants acquitted is Afework “Affe” Bereket.
As highlighted in this prior post, in September 2021, Bereket was criminally charged by the DOJ with 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.” According to the docket, there has been no case activity in this matter since the indictment was unsealed in September 2021.
This post will be updated upon receiving an English language version of the Swedish court opinion, but according to reports:
“The prosecution has failed to prove that two of the three alleged recipients of bribes or irregular rewards fell within the limited scope of corruptible persons defined by the legislation in force at the time,” the Solna District Court said in a statement. “With regards to the third beneficiary, the prosecution has failed to prove that any bribes or undue payments were made to them,” the court added. According to the court, for the charges to be upheld “the bribe or reward must be related to the recipient’s performance of his or her work or duties in such a way that he or she was able to exert influence in a way that promoted the donor’s interests”.
This isn’t the first time a Swedish court decision has called into question the validity and legitimacy of FCPA enforcement actions.
As discussed in this post, in recent years the U.S. the U.S. government secured approximately $1.7 billion in net Foreign Corrupt Practices Act settlement amounts in related FCPA enforcement actions against telecommunications companies VimpelCom, Telia, and MTS. The enforcement actions were largely based on the theory that Gulnara Karimova (the daughter of former Uzbekistan President Islam Karimov) was a “foreign official” under the FCPA’s anti-bribery provisions. However, a Swedish trial court acquitted various Telia executives because Karimova was not a “public official” under the relevant law and a Swedish appellate court affirmed the acquittal and also concluded that Karimova was not a “public official” under the relevant law.
