Criminal Services Market Booms as Facilitators Help Money Laundering Schemes
=====================================================
A growing market for criminal services has emerged in recent years, where criminals buy or rent services needed for specific schemes. This includes money laundering, which is becoming increasingly sophisticated.
The Role of Facilitators
Facilitators are key players in this market, providing expertise and connections to help criminal operators insert illegal funds into the legal economy, both domestically and abroad. They often work through legitimate businesses, using their knowledge of financial transactions and corporate law to facilitate money laundering.
Services Offered by Facilitators
According to a report by a government authority, facilitators can offer a range of services, including:
- Advice on registering and running companies
- Purchasing and selling assets
- Inserting criminal proceeds into the legal economy
- Providing fake identities or frontmen for criminal operators
The Most Skilled Facilitators
The most skilled players often work with the support of a legitimate business, while others may be forced to assist due to threats or pressure from criminals.
Cash Handling Services Under Scrutiny
As banks have reduced their cash handling services in Sweden, criminal operators have turned to other providers, such as currency exchangers and money transferors. However, some of these operators conduct business without a license or registration, creating vulnerabilities in the system.
Vulnerabilities in Swedish Anti-Money Laundering Regime
A government authority has identified several vulnerabilities in Sweden’s anti-money laundering regime, including:
- Inadequate identity verification
- Uneven reporting to the Financial Intelligence Unit and too few actors with reporting obligations
- Government agency operations or practices exploited by criminals
- Limited exchange of information at a strategic level
- Weak control signals to government agencies regarding anti-money laundering efforts
- Limited resources within the Financial Intelligence Unit
- Limitations of supervisory bodies
Inadequate Identity Verification
Government agencies and other actors often rely on the checks carried out by the issuing authority, assuming that they are correct. However, this assumption can be exploited by criminals, who may use false identification to facilitate money laundering.
The Swedish Tax Agency has acknowledged that companies and individuals have a flawed understanding of the coordination number system, believing that it ensures accurate information without requiring further checks.
Uneven Reporting to Financial Intelligence Unit
The anti-money laundering regulations require business operators to report suspected money laundering and terrorist financing to the Financial Intelligence Unit. However, the reporting is uneven, with only a small proportion of actors in Sweden fulfilling their obligations. This creates vulnerabilities in the system, making it easier for criminals to go undetected.
Conclusion
As the criminal services market continues to grow, it is crucial that authorities take steps to address these vulnerabilities and strengthen their anti-money laundering regime to prevent illegal funds from entering the legal economy.