Panama Ericsson Fined for Trading with Cuba

The Department of Commerce has imposed a fine of $1.75 million on the Panamanian subsidiary of Ericsson for exporting equipment to the Caribbean island, violating trade restrictions.

Friday, May 25, 2012

Ericsson Panama, subsidiary of the multinational of Swedish origin, will be fined $1.75 million by the U.S. Department of Commerce for exporting mobile network equipment to Cuba, violating trade restrictions in Washington.

The company and U.S. officials reached an agreement on Thursday, according to Reuters, which claims to have a copy of such document, although no public announcement has been made.

Ericsson acknowledged an operation by which faulty equipment was sent out of Cuba to be repaired in the United States, masking its true origin to the export control office at the Department of Commerce. Once returned to Panama, the equipment was sent back to the island.

This triangulation scheme was developed by three former employees of Ericsson in Panama, said a spokesman for the multinational headquarters in Sweden, Fredrik Hallstan. "It is not a standard procedure of Ericsson’s, we have changed our processes", he said.

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