Ericsson reaches resolution on U.S. FCPA investigations to resolve criminal charges

Ericsson has entered into a three-year Deferred Prosecution Agreement (DPA) with the U.S. Department of Justice (DOJ) to resolve criminal charges related to violations of the FCPA. This relates to accounting violations of the FCPA in five countries including in Djibouti where there is also a charge of bribery. 

In the agreement, the DOJ agrees to defer the prosecution of those charges and to have them dismissed at the end of the term in exchange for Ericsson complying with the conditions of the DPA. Conditions include a payment by Ericsson of a fine of USD 520,650,432. As part of the resolution with the DOJ, Ericsson's Egyptian subsidiary has entered a guilty plea to the bribery charge in Djibouti. 

Separately, Ericsson agreed to resolve civil charges brought by the Securities and Exchange Commission (SEC) relating to allegations of violations of the bribery and accounting provisions of the FCPA.  

Ericsson agreed to the entry of a judgment enjoining it from future violations of the FCPA and it agreed to pay a financial sanction of USD 458,380,000, plus pre-judgment interest of US$81,540,000.

As part of the settlement, Ericsson has agreed to engage an independent compliance monitor for a period of three years while the Company continues to undertake significant reforms to strengthen its Ethics & Compliance program.

The resolution relates to historical FCPA breaches ending Q1 2017. While the company had a compliance program and a supporting control framework, they were not adequately implemented. Specifically, certain employees in some markets, some of whom were executives in those markets, acted in bad faith and knowingly failed to implement sufficient controls. They were able to enter into transactions for illegitimate purposes and, together with people under their influence, used sophisticated schemes in order to hide their wrongdoing.

The resolution marks the end of the FCPA-related investigations into Ericsson and its subsidiaries undertaken by the DOJ and the SEC.

The DOJ proceeding is a criminal enforcement action and the SEC proceeding is a civil enforcement action.  

The agencies resolve their investigation independently of one another using their own discretion and applying different standards of proof.  As a result, the DOJ and SEC have come to different conclusions based on the same facts.

U.S. Department of Justice takes evolution of unmanned aircraft systems in account; updates its policy documentation

The Justice Department announced publication of its updated policy on the Use of Unmanned Aircraft Systems. In light of advancements in unmanned aircraft system (UAS) technology, and lessons learned from the Federal Bureau of Investigation’s limited use of UAS, the policy enables the Department of Justice’s law enforcement components to safely and responsibly employ UAS technology within a framework designed to provide accountability and protect privacy and civil liberties.

The Policy permits the use of UAS only in connection with properly authorized investigations and activities.  It also requires compliance with the Constitution and all applicable laws and regulations, including regulations issued by the Federal Aviation Administration.  

Department of Justice components anticipate using UAS to support crime scene response and investigation, search and rescue, and site security, among other authorized uses. 

In order to ensure accountability and airspace safety, the Department requires UAS operations to be approved at an appropriate level and conducted by personnel who meet Department-wide training standards. Importantly, the new policy also requires components to evaluate UAS acquisitions for cybersecurity risks, guarding against potential threats to the supply chain and DOJ’s networks.  

“UAS technology assists the Department in protecting public safety and, most importantly, reduces risks to officers and the public,” said Beth A. Williams, Assistant Attorney General for the Office of Legal Policy.  “Our new policy promotes the responsible, appropriate, and effective use of UAS by the Department and can serve as a model for our state, local, tribal, and territorial public safety partners as they develop their own UAS programs and best practices.” 

The policy reflects the department’s commitment to the protection of privacy and civil liberties, mandating annual privacy reviews of UAS programs and assessments of new UAS technology from a privacy perspective.  It also places limits on data retention, generally requiring privacy sensitive data to be deleted within 180 days, unless certain exceptions are met. 

In addition to utilizing UAS as a law enforcement tool, the Department takes seriously the threat posed by unlawful and unsafe uses of UAS.  The Department has trained federal prosecutors and agents across the country on the criminal and civil enforcement tools available to counter the misuse of UAS, such as the use of drones to smuggle contraband into prisons or violate restricted airspace.  

Department of Justice personnel have also trained and collaborated with senior state, local, tribal, and territorial law enforcement officials who face this new threat on a daily basis. 

The department welcomes lawful and beneficial uses of UAS, which promise to enhance the economy and transform the delivery of goods and the provision of critical services ranging from search-and-rescue to industrial inspections. At the same time, the department will not hesitate to take action against those who threaten the safety of skies and the public. 

The updated policy announced draws on the department’s long history of leveraging technology to protect the public, while promoting values and the rule of law.