Sweden’s New Anti-Money Laundering Act: Enhancing Financial Compliance Procedures

In response to Sweden’s new Anti-Money Laundering (AML) Act, businesses are taking significant steps to strengthen their financial compliance procedures. This article outlines how Swedish firms are adapting to the legislation and the essential procedures they must implement.

Essential Procedures for Financial Compliance

To effectively implement financial compliance procedures, firms must have defined measures in place for:

Customer due diligence
Monitoring
Reporting
Processing of personal data

These procedures must be risk-based and aligned with the firm’s overall risk assessment. For multinational corporations, group-wide policies are necessary, with parent companies establishing common procedures and guidelines.

Major Categories of Procedures

The new AML act recognizes three major categories of procedures for firms:

Verification of identity
Risk assessment
Enhanced due diligence
Monitoring activities
Transactional controls

These procedures help mitigate risks identified by the firm.

Background screening
Training programs
Protecting employees

These procedures ensure staff are well-equipped to handle anti-money laundering and terrorist financing tasks.

3. Compliance and internal control functions

Roles and responsibilities of key functions
The specially appointed executive
The appointed officer for reporting obligations
The independent audit function

These functions play a critical role in implementing and maintaining effective financial compliance procedures.

Model Risk Management

Accurate and effective risk management models are essential for assessing risk and classifying customers. Procedures for quality assurance, validation, and documentation are necessary to ensure model’s accuracy and efficiency.

Key Functions and Their Responsibilities

The specially appointed executive

Implementing measures for AML Act compliance
Performing risk assessment
Maintaining internal procedures and guidelines
Reporting to the board or managing director

The appointed officer for reporting obligations

Ensuring compliance with laws and regulations
Providing advice, support, and training
Reporting to the board or CEO

The independent audit function

Reviewing organizational structures and IT systems
Examining procedures and guidelines
Reporting directly to the board of directors

Outsourcing Tasks

Firms have the option of outsourcing tasks related to the independent audit function. However, they remain responsible for the outsourced activities.

By implementing these procedures and functions, Swedish firms are better prepared to counteract money laundering and terrorist financing activities.