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Sweden’s KYC Requirements: A Comprehensive Guide

When it comes to knowing your customer (KYC) requirements in Sweden, banks and financial institutions must adhere to strict regulations to prevent money laundering and terrorist financing.

Identification Requirements for Domestic and International Customers

For domestic customers, financial institutions must verify identity using approved identification documents such as:

  • ID card
  • Passport
  • Social security number

For international customers, a valid passport and a copy of the document must be kept on file. Corporate customers require official registration documents and identification of representatives through approved identification documents.

AML Regime in Sweden

Sweden’s AML regime is governed by the 2009:62 Money Laundering and Terrorist Financing (Prevention) Act, which became effective in 2009.

  • The Swedish Financial Supervisory Authority (Finansinspektionen) is responsible for regulating AML controls for banking.

Retroactive Verification

Financial institutions must verify the identity of customers retroactively if motivated by a risk of money laundering or terrorist financing.

FATF Mutual Evaluation

Sweden was subject to an IMF Financial Sector Stability Assessment in 2011 and has implemented several recommendations since then. The country is considered compliant with the FATF’s Recommendations on Combating Money Laundering and Terrorist Financing.

Minimum Transaction Thresholds

Financial institutions must report transactions of EUR 15,000 or more as suspicious activities.

Enhanced Due Diligence Measures

Enhanced due diligence measures are required in certain circumstances, such as:

  • Establishing a business relationship with a Politically Exposed Person (PEP) residing abroad
  • In cases where the risk of money laundering or financing of terrorism is deemed to be high

Correspondent Banking Relationships

Financial institutions must gather sufficient information about correspondent banks to assess their reputation and AML/CFT controls. The bank must also verify that the correspondent bank undertakes KYC procedures for its customers and can provide relevant information.

Suspicious Activity Reporting

Financial institutions are required to report suspicious activities to the Financial Intelligence Unit (Finanspolisen).

Penalties for Non-Compliance

Non-compliance with reporting requirements or intentional/negligent failure to comply carries penalties under Chapter 7 of the 2009:62 Money Laundering and Terrorist Financing (Prevention) Act.

Automated Suspicious Transaction Monitoring Technology

There is no requirement to use automated suspicious transaction monitoring technology, although a risk-based approach may be required in certain circumstances.

Data Protection Laws

Sweden has data protection laws that require financial institutions to protect personal data. The country also has restrictions on the transfer of credit reports and sensitive data.

In conclusion, Sweden’s KYC requirements are designed to prevent money laundering and terrorist financing by ensuring that financial institutions verify the identity of customers and report suspicious activities. Financial institutions must comply with these regulations to avoid penalties and maintain a safe and secure financial system.