Financial Crime World

Sweden Must Establish Effective AML Mechanism to Prevent Money Laundering and Terrorist Financing

Sweden’s financial sector is vulnerable to money laundering and terrorist financing, as highlighted by a recent report from the Financial Action Task Force (FATF). The country lacks a national anti-money laundering (AML)/counter-terrorism financing (CTF) mechanism, making it essential for Sweden to establish an effective regime.

Background: FATF Mutual Assessment Report

In 2017, the FATF issued a Mutual Assessment Report on Sweden’s AML/CTF regime. The report found that Sweden performed well overall but identified several areas of improvement. An effective AML regimen requires a thorough understanding of risks and challenges, which Sweden has taken significant steps towards by:

  • Criminalizing money laundering
  • Imposing severe penalties for non-compliance

Recent Money-Laundering Scandals in Sweden

Two major money-laundering scandals have shaken the Swedish financial sector in recent years: Swedbank and SEB.

Swedbank

In 2020, Swedbank was fined $400 million for failing to stop suspicious transactions. An audit found that senior management had failed to set effective limits to prevent money laundering between 2007 and 2019.

SEB

SEB has been embroiled in a scandal involving Russian money laundering, with 90 individuals and institutions linked to the bank being associated with money laundering cases. An investigation by SVT revealed that most transactions worth €200 billion belonging to SEB between 2007 and 2015 were “suspicious.”

Sweden’s AML Laws and Compliance

To prevent money laundering, Sweden has two main AML laws:

  • The Swedish Money Laundering and Financing of Terrorism Act (Anti-Money Laundering Act): All entities subject to the law must have an AML compliance program that adopts a risk-based approach and develops policies to prevent money laundering.
  • The Money Laundering Crimes Penal Code: Businesses must establish their own anti-money laundering policies and comply with regulations to prevent money laundering.

Role of the Swedish Financial Supervisory Authority (SFSA)

The SFSA is responsible for:

  • Authorizing financial companies in Sweden
  • Monitoring and supervising all financial companies in Sweden
  • Increasing efficiency in the financial system
  • Protecting consumer rights

Solutions for Businesses: Sanction Scanner

To help businesses fulfill their AML obligations, Sanction Scanner offers solutions that enable:

  • Know Your Customer (KYC)
  • Customer Due Diligence (CDD)
  • Transaction Monitoring
  • Risk management measures

By taking stricter measures against possible risks, businesses can create a safer environment for customer due diligence and prevent money laundering in Sweden.