According to Swedish newspaper Dagens Industri, Swedish telecom giant Ericsson is said to have assisted radical Islamic jihadist outfit Al Qaeda in Iraq and Afghanistan with high-tech equipment continuously for nine years – during the years 2008-2017. It is also learnt, Ericsson allegedly preferred to give Al-Qaeda the technology equipment rather than cash in order to continue its operations in Iraq and Afghanistan undisturbed.
A former colonel, who is one of several insider witnesses involved in a lawsuit against the Swedish telecom giant filed by lawyers representing relatives of Al Qaeda’s victims told the court that the equipment provided by Ericsson to Al Qaeda include trucks, signal communication equipment, telephones, computers and satellite nodes placed in a special “stashes” where Al Qaeda members then retrieved them. Swedish newspaper Dagens Industri tried to get comment from Ericsson, which was declined.
This is not the sole case where Ericsson has been in the spotlight for financing radical Islamic militancy and terrorism. According to SVT Nyheter newspaper, Ericsson was involved in corruption in Iraq and financing Islamic State (ISIS).
In February 2022, the Swedish television program Uppdrag Granskning showed that the company may have used bribes to finance the Islamic State – another radical Islamic militancy outfit. The purpose of the bribes was allegedly to obtain permission to continue building mobile phone masts in the region.
On March 1, 2022 the US Department of Justice announced that Ericsson, by withholding information about Iraq, has violated the settlement from 2019.
A settlement that came about after corrupt deals in China and Indonesia, among others. Ericsson then paid Swedish Krone (SEK) 10 billion in fines and entered into an agreement to report any new suspicion of bribery. Ericsson risks new fines. After the disclosure in February 2023, until the general meeting in March, Ericsson’s share plummeted – a sharp drop of over 30 percent, which corresponds to SEK 100 billion in market capitalization.
Earlier on October 19, 2022, SVT Nyheter reported that the US authorities promised tougher measures against companies that bribe. In particular, against companies that violate settlements with the US government – such as Swedish telecom giant Ericsson.
The report further said quoting Peter Utterström, lawyer and corruption expert that Ericsson’s Chief Executive Officer Börje Ekholm was under the potential risk of facing prosecution and imprisonment.
In August 5, 2022, the International Consortium of Investigative Journalists (ICIJ) in a report said, according to the lawsuit against Ericsson, the company hired consultants and subcontractors who used an “offloading scheme” to finance terrorism.
Under such a scheme, the lawsuit said, companies negotiate with a trusted intermediary ally to “offload” an illicit payment stream to that intermediary.
“Such ally, in turn, typically does not have the same legal exposure as the partner doing the offloading (e.g., the difference between a US company and an Iraqi firm), and therefore agrees to serve the offloading function in exchange for some benefit, such as off-books cash payoffs, commercially unreasonable terms (in the ally’s favor) on another aspect of their contract, free goods, and so on”, the lawsuit said.
When the local provider Asiacell made protection payments to al-Qaeda, al-Qaeda-in-Iraq, and Islamic State, according to the lawsuit, it often did so through Ericsson or its subcontractors.
Likewise, Ericsson used Korek and others in an “offloading” strategy to pass illicit payments to militants, the lawsuit said.
The alleged payments described in the lawsuit helped finance suicide attacks, hostage taking, torture, roadside bombs and beheadings in Iraq, Afghanistan and Syria and claimed hundreds of lives. To date, Al-Qaeda, Al-Qaeda-in-Iraq, and the Islamic State have collectively killed, or helped kill, more than 2,500 US service members and wounded roughly 30,000 more throughout the Middle East, Europe, Asia and Africa, the lawsuit says.
The Wall Street Journal in a report said, the suit follows Ericsson’s admission in February that it had found “serious breaches of compliance rules” in Iraq, including evidence of corruption-related misconduct. Ericsson has been active in the country following the lifting of a United Nations embargo that led to the reopening of the country’s telecommunications equipment market.The Anti-Terrorism Act (ATA), is sometimes known, allows victims to seek large damages from perpetrators and parties that aid them. The law has led to major judgments against foreign states, some in the billions of dollars.
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