Last week, the U.S. Department of Justice (DOJ) announced that Sweden-based multinational telecommunications company Telefonaktiebolaget LM Ericsson (Ericsson) will plead guilty to breaching the Foreign Corrupt Practices Act (FCPA) and has agreed to pay over $206 million in related penalties following its alleged breach of a 2019 Deferred Prosecution Agreement (DPA) with the Department.
According to the Assistant Attorney General for the Criminal Division, Kenneth A. Polite, Jr., Ericsson breached the DPA when it “repeatedly failed to fully cooperate and failed to disclose evidence and allegations of misconduct.” The DPA required Ericsson to continue to cooperate with the Department in any ongoing investigations and prosecutions relating to the alleged FCPA violations, to enhance its compliance program, and to retain an independent compliance monitor for a period of three years. Failure to comply with any part of the agreement would subject Ericsson to federal criminal prosecution, including the charges outlined in the criminal Information filed in conjunction with the DPA.
Ericsson entered into the DPA in December 2019, following DOJ’s investigation into the company’s alleged use of third-party agents and consultants to manage off-the-books slush funds in Djibouti, China, Vietnam, Indonesia, and Kuwait and to pay millions in bribes to high-ranking government officials, from 2000 until 2016. Ericsson agreed to pay a $520 million criminal penalty pursuant to the DPA, as well as an additional $540 million to resolve an SEC investigation arising from the same underlying conduct.
According to DOJ’s announcement last week, Ericsson breached the terms of that agreement by failing to disclose all factual information and evidence concerning the alleged unlawful conduct in Djibouti and China and also by failing to disclose potential FCPA violations related to its business activities in Iraq.
As a result of its alleged breach, Ericsson agreed to pay an additional criminal penalty of approximately $206 million, which includes the elimination of a 15% cooperation credit the company received under the 2019 DPA. It will also plead guilty to the original charges that were deferred by the 2019 DPA: one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the internal controls and books and records provision of the FCPA. The deal further requires the company to serve probation through June 2024, and to extend the independent monitor required under its DPA for an additional one-year term.
This enforcement action serves as a potent reminder of the critical importance of effective remediation of past misconduct, as well as the serious ongoing compliance and reporting burdens that can accompany a DPA. As Assistant Attorney General Polite noted when announcing the plea, “Companies should be on notice that . . . [the Department] will closely scrutinize their compliance with all terms of corporate resolution agreements,” and that it will impose “serious consequences” for entities the government views as failing to meet their commitments under such agreements.
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 Press Release, Off. of Pub. Affs., U.S. Dep’t of Justice, Ericsson to Plead Guilty and Pay Over $206M Following Breach of 2019 FCPA Deferred Prosecution Agreement (March 2, 2023), https://www.justice.gov/opa/pr/ericsson-plead-guilty-and-pay-over-206m-following-breach-2019-fcpa-deferred-prosecution.
 Press Release, Off. of Pub. Affs., U.S. Dep’t of Justice, Ericsson Agrees to Pay Over $1 Billion to Resolve FCPA Case (December 6, 2019), https://www.justice.gov/opa/pr/ericsson-agrees-pay-over-1-billion-resolve-fcpa-case.
 Deferred Prosecution Agreement, United States v. Telefonaktiebolaget LM Ericsson, No. 1:10-cr-00884-AJN (S.D.N.Y. Dec. 6, 2019), https://www.justice.gov/opa/press-release/file/1272151/download.
 Supra, note 2.