Ericsson uncovers violations in Iraq corruption probe - Mobile World Live

Ericsson uncovers violations in Iraq corruption probe

16 FEB 2022

Ericsson found serious breaches of its business ethics policies during an internal investigation into historical activities of staff and suppliers in Iraq, as it raised the possibility payments were made to terrorist organisations.

In a statement following media enquiries into the issue, Ericsson disclosed the results of an investigation undertaken in 2019 for its activities in Iraq between 2011 and 2019.

The probe found evidence of what Ericsson described as corruption-related misconduct.

Among the findings was evidence of: making a monetary donation without a clear beneficiary; paying a supplier for work without a defined scope and documentation; using suppliers to make cash payments; funding inappropriate travel and expenses; and improper use of consultants and sales agents.

This is in addition to various violations of internal financial control rules, non-compliance with tax laws and obstruction of the investigation itself.

Ericsson added its probe also found “payments to intermediaries and the use of alternate transport routes in connection with circumventing Iraqi Customs, at a time when terrorist organisations, including ISIS, controlled some transport routes.”

It noted the investigation was unable to determine the ultimate recipient of payments.

Investigators also found “payment schemes and cash transactions that potentially created the risk of money laundering”.

Discipline issues
Ericsson stated it had already terminated several business relationships, removed employees and taken various other disciplinary measures as a result of the findings.

It has also provided “enhanced training and awareness activities” for staff in the country.

Ericsson’s investigation followed the identification of unusual expense claims dating to 2018 and was conducted with its legal advisers.

The company and its external counsel are still reviewing the results.

In 2019, Ericsson paid $1.1 billion to US authorities to settle a corruption investigation spanning “at least” five markets across 17 years. Iraq was not cited in the original list and it is unclear these revelations fall under the same settlement.

Ericsson subsequently paid compensation to rival Nokia and some former employees faced criminal investigations.

In its statement regarding the Iraq revelations, Ericsson emphasised: “We reiterate our commitment to investigate and take action as appropriate to address any new information, in line with our Code of Business Ethics and under the terms of our 2019 Deferred Prosecution Agreement, with US authorities.”

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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