Mutual Evaluation Report Sweden - 2017
Paris, 25 April 2017 – Sweden has a strong regime to tackle the money laundering and terrorist financing risks it faces, but needs to improve its national policy coordination.
The FATF conducted an assessment of Sweden’s anti-money laundering and counter-terrorist financing (AML/CFT) system, based on the 2012 FATF Recommendations. This assessment reviews the level of effectiveness of Sweden’s AML/CFT regime as well as its level of technical compliance with the FATF Recommendations.
Sweden is generally perceived as a low crime country. It nevertheless faces money laundering risks, because of its role as a regional financial centre and resulting from domestic crimes - particularly tax crimes. Swedish authorities have a reasonable understanding of these risks, although the lack of a national AML/CFT coordination mechanism means that different authorities do not share the same understanding of the risks, or respond to them in a coordinated way.
Sweden also faces terrorist financing risks, in particular associated with ISIL and foreign terrorist fighters. Swedish authorities prioritise combating terrorist financing and integrate this with other counter-terrorism work. However, there are legal and practical weaknesses in Sweden’s implementation of targeted financial sanctions to freeze terrorist assets, which should be addressed urgently.
Sweden prioritises international cooperation and has established highly effective mechanisms for providing it. Law enforcement cooperation is a particular strength. Sweden’s new money laundering offence (amended in 2014) has greatly improved the potential for investigation and prosecution of money laundering activity. Authorities have shown their commitment and effectiveness in pursuing money laundering cases, although it is not yet clear that the criminal sentences are effective and dissuasive. Swedish authorities efficiently trace criminals assets and consider confiscation a highly dissuasive penalty. Financial intelligence is used systematically, but weak IT tools and lack of strategic analysis mean that authorities are not yet using the full potential of financial intelligence to pursue complex cases of money laundering.
All the elements of Sweden’s AML/CFT supervisory system are in place, but there are weaknesses in applying risk-based supervision. Financial institutions’ and designated non-financial businesses’ and professions’ (DNFBPs’) compliance with their obligations is generally adequate: large banks have made significant efforts to enhance AML/CFT compliance, but there is a need to improve smaller financial institutions’ and DNFBPs’ understanding of the risks they are exposed to. There are also several remaining areas where Sweden’s AML/CFT regulations should be updated to reflect the 2012 FATF standards.
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Consolidate assessment ratings - an overview of ratings that assessed countries obtained for effectiveness and technical compliance.
Key findings, ratings and priority actions: