Sweden's measures to combat money laundering and terrorist financing

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English

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Mutual Evaluation Report Sweden - 2017

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MER-Sweden-2017.pdf
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2 MB
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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.  

 

Technical Compliance

Ratings which reflect the extent to which a country has implemented the technical requirements of the FATF Recommendations.

Sweden Mutual Evaluation - 2017

R.1 - Assessing risk & applying risk-based approach
LC
R.2 - National cooperation and coordination
PC
R.3 - Money laundering offence
LC
R.4 - Confiscation and provisional measures
LC
R.5 - Terrorist financing offence
LC
R.6 - Targeted financial sanctions related to terrorism & terrorist financing
PC
R.7 - Targeted financial sanctions related to proliferation
PC
R.8 - Non-profit organisations
LC
R.9 - Financial institution secrecy laws
LC
R.10 - Customer due diligence
LC
R.11 - Record keeping
C
R.12 - Politically exposed persons
LC
R.13 - Correspondent banking
LC
R.14 - Money or value transfer services
C
R.15 - New technologies
C
R.16 - Wire transfers
PC
R.17 - Reliance on third parties
PC
R.18 - Internal controls and foreign branches and subsidiaries
PC
R.19 - Higher-risk countries
LC
R.20 - Reporting of suspicious transactions
C
R.21 - Tipping-off and confidentiality
C
R.22 - DNFBPs: Customer due diligence
LC
R.23 - DNFBPs: Other measures
LC
R.24 - Transparency and beneficial ownership of legal persons
PC
R.25 - Transparency and beneficial ownership of legal arrangements
PC
R.26 - Regulation and supervision of financial institutions
PC
R.27 - Powers of supervisors
LC
R.28 - Regulation and supervision of DNFBPs
LC
R.29 - Financial intelligence units
LC
R.30 - Responsibilities of law enforcement and investigative authorities
C
R.31 - Powers of law enforcement and investigative authorities
LC
R.32 - Cash couriers
PC
R.33 - Statistics
LC
R.34 - Guidance and feedback
LC
R.35- Sanctions
LC
R.36 - International instruments
C
R.37 - Mutual legal assistance
LC
R.38 - Mutual legal assistance: freezing and confiscation
LC
R.39 - Extradition
C
R.40 - Other forms of international cooperation
C

C = compliant   |   LC = largely compliant     |   PC = partially compliant   |   NC = non-compliant

Effectiveness

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Sweden Mutual Evaluation - 2017

IO1
ME
IO2
HE
IO3
ME
IO4
ME
IO5
ME
IO6
ME
IO7
SE
IO8
SE
IO9
SE
IO10
ME
IO11
SE

HE = high level of effectiveness   |   SE = substantial level of effectiveness    |   ME = moderate level of effectiveness   |   LE = low level of effectiveness

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The FATF Recommendations

The FATF Recommendations are the basis on which all countries should meet the shared objective of tackling money laundering, terrorist financing and the financing of proliferation. The FATF calls upon all countries to effectively implement these measures in their national systems.

Mutual Evaluations

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FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems

The FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems sets out the evaluation process.