Ericsson CEO Borje Ekholm told the Swedish newspaper Industrial Dagens that the company may have made payments to the Islamic State (ISIL/ISIS) terrorist organization for its operations in Iraq. According Bloomberg, the CEO said the telecom giant had identified “unusual expenses since 2018”. While the ultimate recipient of these payments has yet to be identified, Ekholm admitted he is seeing records of transport routes purchased “through areas controlled by terrorist organizations, including ISIS.”
Ekholm’s admission comes after Ericsson issued a statement in which it said it continues to “invest significantly” in an investigation into compliance issues surrounding its Iraq business. In that statement, Ericsson said unusual expense claims triggered an internal investigation in 2019, which led to the discovery of “serious breaches of compliance rules” in the conduct of its employees, suppliers and suppliers in Iraq. Regarding the transport routes purchased in particular, Ericsson said they were used “in connection with the evasion of Iraqi customs”. The company wrote:
“Ericsson has invested significant time and resources to understand these issues. The investigation failed to identify that any Ericsson employees were directly involved in funding terrorist organizations.”
After Ericsson released its statement, the International Consortium of Investigative Journalists (ICIJ) revealed that the company spoke to resolve irregularities that the consortium uncovered as part of a global investigation. The ICIJ also said it will publish its own findings “soon”.
Ericsson is landing en masse 5G contracts around the world in the last two years, in part because some countries need to replace banned Huawei equipment used on its networks. This isn’t the first time the telecoms giant has been caught up in a corruption scandal, however. He was previously accused of violating the Foreign Corrupt Practices Act between 2000 and 2016 for bribing officials and falsifying records. In 2019, Ericsson settled with the US Department of Justice and the SEC for $1.1 billion to leave it virtually free of criminal convictions, sanctions and penalties. But American prosecutors determined last year, who violated the terms of the agreement by failing to provide certain documents and information related to the agreement.
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