Ericsson makes $220M provision in Q4 for potential DPA breach resolution

Ericsson is now in a position to make a provision of $220M in relation to a potential resolution with the U.S. Department of Justice – DOJ – regarding previously announced, non-criminal, alleged breaches under its 2019 Deferred Prosecution Agreement. Ericsson has not reached a resolution with the DOJ regarding these alleged breaches and discussions are ongoing. This charge, which will be booked in the company’s Q4 financial results, will be SEK2.3B, or approx. $220M. The company believes that this is a sufficiently reliable estimate of the financial penalty associated with any potential breach resolution, and this provision also includes estimated expenses for the previously announced extended monitorship. The company’s internal investigation and its cooperation with authorities in relation to the allegations in the 2019 Iraq-related internal investigation report remain open and ongoing. The company agreed in December 2022 to extend its independent compliance monitorship until June 2024 to further our efforts to embed best-in-class compliance, risk management and internal controls frameworks across the organization. The DOJ notified Ericsson that it failed to provide documents and information to the DOJ in a timely manner and did not adequately report to the DOJ certain information relating to a 2019 Iraq-related internal investigation. The DOJ has not alleged or charged Ericsson with any new criminal misconduct since the start of the DPA.