Swedish telecommunications company Ericsson admits it may have paid off the Islamic State Business

Ericsson has admitted to bribing the Islamic State terror group in exchange for permission to use roads through Iraq.

The Swedish telecommunications company’s share price fell 13% on Wednesday morning after it said investigators had uncovered evidence that payments had been made for “the use of transport routes in the context of bypassing Iraqi customs”.

Borje Ekholm, managing director of Ericsson, told Dagens Industri newspaper: “What we see is that people have paid for road transport through areas controlled by terrorist organisations, including IS.

“With the means at our disposal, we have not been able to determine the final recipients of these payments.”

His comments followed a lengthy statement released by the company on Tuesday evening, which said several employees had been terminated as a result of the internal investigation.

It’s a new embarrassment for the company after it was forced into a billion-dollar settlement with US authorities in 2019 over alleged bribes and corruption in Asia and the Middle East.

The company did not say whether the findings detailed on Tuesday related to those allegations.

Ericsson said its investigation, backed by a law firm, was prompted by “unusual expense claims” from its Iraq business in 2018.

The subsequent process reviewed the actions of staff and vendors in the country from 2011 to 2019 and found “serious violations” of law and ethical guidelines.

Investigators found evidence of corrupt practices including paying bribes, giving cash to vendors for indefinite work, using vendors to make cash payments and paying for travel and “inappropriate” expenses.

“The investigative team also identified payments to middlemen and the use of alternative transport routes in connection with the circumvention of Iraqi customs, at a time when terrorist organizations, including IS, controlled certain routes. transportation,” the statement added.

“Investigators could not determine the final recipients of these payments.

“The investigation did not identify that an Ericsson employee was directly involved in the financing of terrorist organizations.”

Ericsson said the way payments were handled also created a money laundering risk.

The company said it used “considerable time and resources to understand these issues.”

Mr. Ekholm added: “The financing of terrorism is completely unacceptable and something that we do not allow at all.”

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This notice was published: 2022-02-16 12:19:23

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