The Foreign Corrupt Practices Act (FCPA), since 1977, has restricted the US entities and individuals to transfer payments to the foreign government authorities for sealing or continuing a deal. The Securities and Exchange Commission is collectively working with the Department of Justice to impose the FCPA stringently across the nation. Facing the similar issue is Stockholm-based leading telecom equipment developer, Ericsson, which has been subjected to the investigations by SEC and Department of Justice for breaching the FCPA. The investigations cover a 4-year period which reportedly concluded in the first quarter of 2017 and depicted the company’s violations of FCPA and its business code in China, Indonesia, Kuwait, Saudi Arabia, and Vietnam. It has been reported that the company is hit by 12 billion SEK (Swedish krona) provision, along with other additional costs, to settle the FCPA breach investigations. Further, the hit is expected to impact the company’s third quarter profit. Ericsson authorities have recognized the breaches in the business code and have claimed that the failure to meet the FCPA’s requirements have resulted the company a dismissal of employees involved in the act of bribery. The President and CEO of Ericsson, Borje Ekholm, was reportedly quoted stating that the company has recognized the FCPA failure in the past and has apparently enhanced its compliance programs for the effective functioning of the company over the coming years. Perhaps, apart from the economical provisions, the company is said to experience reputational harm in tandem with various other negative consequences which would impact its telecom business in the longer run. Additionally, the company has remained tight lipped on the ongoing investigation process with the governing authorities. As per trusted reports, Ericsson’s average income for the second quarter of 2019 substantially increased to SEK 1.8 billion which is aptly attributed to the recent 5G contracts and release of next-gen networks. Meanwhile, the company’s gross margin escalated from 34.8 per cent to 36.6 per cent ever year. Source credit: https://www.zdnet.com/article/ericsson-estimating-sek12-billion-hit-to-resolve-us-probes/