(Reuters) -Sweden’s Ericsson has agreed to pay $206 million and plead guilty to violating a 2019 deal with U.S. prosecutors for failing to properly disclose information on its activities in Iraq, China and Djibouti, the U.S. Justice Department said on Thursday.
The plea agreement follows a scandal over possible payments the telecommunications firm paid to the Islamic State militant group through its activities in Iraq.
The Justice Department says the telecommunications firm fell short in disclosing activities after entering a deferred prosecution agreement (DPA) in 2019 to resolve a probe into years of alleged corruption in China, Vietnam and Djibouti.
Under the DPA, the Justice Department had agreed to hold off prosecuting Ericsson for three years if it paid over $1 billion in penalties and other fees, implemented “rigorous internal controls”, complied with U.S. laws and cooperated fully on any ongoing investigations.
“Ericsson breached the DPA by violating the agreement’s cooperation and disclosure provisions,” the Justice Department said in a statement.
The company will be required to serve a probation term through June 2024, and agreed to a one-year extension of an independent compliance monitor, the department added.
Ericsson previously paid a total criminal penalty of more than $520 million and agreed to the imposition of an independent compliance monitor for three years, the Justice Department said on Thursday, referring to the 2019 settlement.
Ericcson said in a statement that the plea agreement would bring the 2019 deferred agreement to an end.
“This resolution is a stark reminder of the historical misconduct that led to the DPA. We have learned from that and we are on an important journey to transform our culture,” Ericsson CEO Borje Ekholm said.
Ericsson last year disclosed that a 2019 internal probe had identified payments designed to circumvent Iraqi customs at a time when militant organizations, including Islamic State, controlled some routes.
(Reporting by Chris Prentice, Rami Ayyub and Kanishka Singh; Editing by Sonali Paul)
