Ericsson’s alleged payments to ISIS detailed in new report

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Islamic State fighter (ISIS) waving a flag while standing on captured government fighter jet in Raqqa, Syria, 2015.
Islamic State fighter (ISIS) waving a flag while standing on captured government fighter jet in Raqqa, Syria, 2015.
Universal History Archive/Universal Images Grou

Ericsson’s involvement in making potential payments to terrorist organization ISIS has been detailed in a new report, which says the telecom firm spent millions of dollars on suspicious transactions to facilitate the sales of its goods in Iraq.

Many of the new details, which includes information on payments likely to have been made to gain access to transport routes in Iraq, originated from an internal report commissioned by Ericsson and obtained by the International Consortium of Investigative Journalists.

The latest revelation comes after Ericsson said on February 16 that it had received questions from the media regarding past compliance-related matters in Iraq. Chief Executive Officer Borje Ekholm said in an interview with local media that Ericsson had identified “unusual expenses dating back to 2018” but the company hasn’t yet determined who the final recipient of the money was.

Shares in the Stockholm-based company fell 14.5% after Ericsson’s initial disclosure. Ericsson’s sales in Iraq totaled about $1.9 billion between 2011 and 2018, according to the report. 

The report will also put added pressure on Ericsson after the company was accused by the U.S. Department of Justice in October of breaching a $1 billion agreement it made with prosecutors in 2019 to end a long-running corruption probe.

Ericsson takes any allegation of misconduct extremely seriously, the company said by email on Sunday.

Key Findings:

  • As Ericsson was entering a $1 billion deferred prosecution agreement with Department of Justice to settle over corrupt practices in five countries (Kuwait, Djibouti, Vietnam, Indonesia and China), it was investigating allegations of impropriety in 14 others (U.S., Brazil, Morocco, Spain, Portugal, Angola, South Africa, Libya, Egypt, Croatia, Lebanon, Iraq, Azerbaijan, Bahrain).
  • Ericsson’s internal report says at least 10 employees violated company ethics, including for bribery, fraud, money laundering and obstructing investigation.
  • Some employees were fired, but at least one was promoted.
  • The review identified 30 trucks paying $3 000 to $4 000 per load to carry Ericsson equipment across areas held by ISIS. This was allegedly to avoid a legal route with backed-up Iraqi customs checkpoints.

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