Criminal Service Market Booms as Facilitators Help Launder Dirty Money
The market for criminal services has seen a recent surge in demand, leading to an increased need for facilitators who help launder dirty money. These facilitators offer a range of services, including:
- Advice on registering and running companies
- Purchasing and sales advice
- Financial transaction management
- Inserting criminal proceeds into the legal economy
Highly Skilled Facilitators
These facilitators are often highly skilled and operate with the support of a business. They may provide criminal operators with:
- Swedish or foreign companies
- Frontmen or identities
- Key positions within money laundering schemes
The increasing demand for facilitators has led to concerns about the vulnerability of Sweden’s anti-money laundering regime.
Vulnerabilities in the System
A recent assessment by the Financial Action Task Force (FATF) identified several vulnerabilities in the system, including:
- Inadequate Identity Verification: Government agencies and other actors often rely on checks carried out by the issuing authority, assuming that they are correct. However, this assumption can be exploited by criminals who use false documents to facilitate money laundering and other criminal schemes.
- Uneven Reporting: While some business operators report suspicious activity, others do not. In 2018, a total of 19,300 reports were submitted to the Financial Intelligence Unit, but this represents only a small proportion of all actors with an obligation to report.
- Government Agency Exploitation: Government agency operations being exploited by criminals
- Limited Exchange of Information: Limited exchange of information at the strategic level
- Weak Control Signals: Weak control signals to government agencies regarding anti-money laundering efforts
Improving Measures to Combat Money Laundering and Terrorist Financing
The increasing demand for facilitators and the vulnerabilities in Sweden’s anti-money laundering regime highlight the need for robust measures to combat money laundering and terrorist financing. The Swedish authorities must work to:
- Improve identity verification
- Increase reporting requirements
- Enhance cooperation between government agencies and other stakeholders to effectively combat these threats.
By addressing these vulnerabilities, Sweden can improve its ability to prevent and detect money laundering and terrorist financing activities, ultimately protecting the integrity of its financial system.