Financial Crime World

Sweden’s Anti-Money Laundering Practices Under Scrutiny: Best Practices and Areas for Improvement

In a recent report, Sweden’s anti-money laundering (AML) efforts have been assessed, highlighting areas of compliance and room for improvement. The report evaluates Sweden’s adherence to the Financial Action Task Force (FATF) Recommendations, which provide a framework for countries to combat money laundering and terrorist financing.

Compliant Areas

Effective National Cooperation and Coordination

  • Inter-agency collaboration: Sweden has established a robust framework for inter-agency collaboration, ensuring effective information sharing and coordination.
  • Money laundering offence: The country has implemented a comprehensive money laundering offence that covers all types of money laundering activities.
  • Confiscation and provisional measures: Sweden’s laws enable the confiscation of proceeds from crime and provides for provisional measures to freeze assets.
  • Financial intelligence unit: Sweden has established a functional financial intelligence unit (FIU) that collects, analyzes, and disseminates suspicious transaction reports.

Largely Compliant Areas

Risk Assessment and Risk-Based Approach

  • Risk assessment: Sweden’s AML/CFT regime is based on a risk-based approach, which involves identifying, assessing, and mitigating risks associated with money laundering and terrorist financing.
  • Customer due diligence: Swedish financial institutions are required to conduct customer due diligence, including verifying the identity of customers and beneficial owners.
  • Record keeping: Financial institutions in Sweden are obligated to maintain accurate and detailed records of transactions.
  • Politically exposed persons: The country has implemented measures to regulate politically exposed persons (PEPs), ensuring that they are subject to enhanced due diligence.

Partially Compliant Areas

Targeted Financial Sanctions

  • While Sweden has established a framework for targeted financial sanctions, it does not fully comply with the FATF’s requirements.
  • Correspondent banking: Swedish banks have correspondent relationships with foreign banks, but the country could improve its regulation and supervision of these relationships.

Non-Compliant Areas

Regulation and Supervision of DNFBPs

  • Sweden needs to strengthen its regulation and supervision of designated non-financial businesses and professions (DNFBPs), including real estate agents and lawyers.
  • Transparency and beneficial ownership: The country has not fully implemented measures to ensure transparency and beneficial ownership of legal persons and arrangements.

Recommendations for Improvement

To address these areas for improvement, Sweden should consider implementing the following measures:

  1. Enhance regulation and supervision of DNFBPs
  2. Improve transparency and beneficial ownership requirements
  3. Strengthen targeted financial sanctions related to terrorism and terrorist financing
  4. Regulate correspondent banking relationships more effectively

By addressing these gaps, Sweden can further strengthen its AML/CFT regime and ensure that it remains compliant with the FATF Recommendations.