Assessment of the measures to combat money laundering and the financing of terrorism and proliferation in Sweden: ratings, key findings and priority actions.

1. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017 1
Anti-money laundering and counter-
terrorist financing (AML/CFT)
measures in Sweden
Fourth Round Mutual Evaluation
Key findings, ratings and priority actions
April 2017
www.fatf-gafi.org/publications/mutualevaluations/documents/mer-sweden-2017.html

2. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017
Ratings – Effectiveness (1/3)
2
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Sweden has
achieved this
objective
1. ML and TF risks are understood and, where appropriate,
actions co-ordinated domestically to combat ML and TF
Moderate
2. International co-operation delivers appropriate information,
financial intelligence, and evidence, and facilitates action
against criminals and their assets
High
3. Supervisors appropriately supervise, monitor and regulate
financial institutions and designated non-financial
businesses and professions (DNFBPs) for compliance with
AML/CFT requirements commensurate with their risks.
Moderate
4. Financial institutions and DNFBPs adequately apply AML/CFT
preventive measures commensurate with their risks, and
report suspicious transactions.
Moderate

3. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017 3
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Sweden has
achieved this
objective
5. Legal persons and arrangements are prevented from misuse
for money laundering or terrorist financing, and information
on their beneficial ownership is available to competent
authorities without impediments
Moderate
6. Financial intelligence and all other relevant information are
appropriately used by competent authorities for money
laundering and terrorist financing investigations.
Moderate
7. Money laundering offences and activities are investigated
and offenders are prosecuted and subject to effective,
proportionate and dissuasive sanctions
Substantial
8. Proceeds and instrumentalities of crime are confiscated. Substantial
Ratings – Effectiveness (2/3)

4. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017 4
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Sweden has
achieved this
objective
9. Terrorist financing offences and activities are investigated
and persons who finance terrorism are prosecuted and
subject to effective, proportionate and dissuasive sanctions.
Substantial
10. Terrorists, terrorist organisations and terrorist financiers are
prevented from raising, moving and using funds, and from
abusing the non-profit sector.
Moderate
11. Persons and entities involved in the proliferation of weapons
of mass destruction are prevented from raising, moving and
using funds, consistent with the relevant United Nations
Security Council Resolutions.
Substantial
Ratings – Effectiveness (3/3)

5. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017 5
Ratings – Effectiveness
25-Apr-2017
1
46
0
High
Substantial
Moderate
Low

6. 21-Apr-17
6
Ratings – technical compliance
(1/5)
AML/CFT POLICIES AND COORDINATION
1. Assessing risks & applying a risk-based approach LarLarLarLar Largely compliant
2. National cooperation and coordination Pa Pa Pa Pa Partially compliant
MONEY LAUNDERING AND CONFISCATION
3. Money laundering offence LarLarLarLar Largely compliant
4. Confiscation and provisional measures LarLarLarLar Largely compliant
TERRORIST FINANCING AND FINANCING OF PROLIFERATION
5. Terrorist financing offence LarLarLarLar Largely compliant
6. Targeted financial sanctions related to terrorism & terrorist
financing Pa Pa Pa Pa Partially compliant
7. Targeted financial sanctions related to proliferation Pa Pa Pa Pa Partially compliant
8. Non-profit organisations LarLarLarLar Largely compliant

7. 21-Apr-17
7
Ratings – technical compliance
(2/5)
PREVENTIVE MEASURES
9. Financial institution secrecy laws LarLarLarLar Largely compliant
Customer due diligence and record keeping
10. Customer due diligence LarLarLarLar Largely compliant
11. Record keeping CoCoCoCo Compliant
Additional measures for specific customers and activities
12. Politically exposed persons LarLarLarLar Largely compliant
13. Correspondent banking LarLarLarLar Largely compliant
14. Money or value transfer services CoCoCoCo Compliant
15. New technologies CoCoCoCo Compliant
16. Wire transfers Pa Pa Pa Pa Partially compliant

8. 21-Apr-17
8
Ratings – technical compliance
(3/5)
PREVENTIVE MEASURES (continued)
Reliance, Controls and Financial Groups
17. Reliance on third parties Pa Pa Pa Pa Partially compliant
18. Internal controls and foreign branches and subsidiaries Pa Pa Pa Pa Partially compliant
19. Higher-risk countries LarLarLarLar Largely compliant
Reporting of suspicious transactions
20. Reporting of suspicious transactions CoCoCoCo Compliant
21. Tipping-off and confidentiality CoCoCoCo Compliant
Designated non-financial Businesses and Professions (DNFBPs)
22. DNFBPs: Customer due diligence LarLarLarLar Largely compliant
23. DNFBPs: Other measures LarLarLarLar Largely compliant

9. 21-Apr-17
9
Ratings – technical compliance
(4/5)
TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL
PERSONS AND ARRANGEMENTS
24. Transparency and beneficial ownership of legal persons Pa Pa Pa Pa Partially compliant
25. Transparency and beneficial ownership of legal arrangements Pa Pa Pa Pa Partially compliant
POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES
Regulation and Supervision
26. Regulation and supervision of financial institutions Pa Pa Pa Pa Partially compliant
27. Powers of supervisors LarLarLarLar Largely compliant
28. Regulation and supervision of DNFBPs LarLarLarLar Largely compliant
Operational and Law Enforcement
29. Financial intelligence units LarLarLarLar Largely compliant
30. Responsibilities of law enforcement and investigative
authorities CoCoCoCo Compliant
31. Powers of law enforcement and investigative authorities LarLarLarLar Largely compliant
32. Cash couriers Pa Pa Pa Pa Partially compliant

10. 21-Apr-17
10
Ratings – technical compliance
(5/5)
POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES (continued)
General Requirements
33. Statistics LarLarLarLar Largely compliant
34. Guidance and feedback LarLarLarLar Largely compliant
Sanctions
35. Sanctions LarLarLarLar Largely compliant
INTERNATIONAL COOPERATION
36. International instruments CoCoCoCo Compliant
37. Mutual legal assistance LarLarLarLar Largely compliant
38. Mutual legal assistance: freezing and confiscation LarLarLarLar Largely compliant
39. Extradition CoCoCoCo Compliant
40. Other forms of international cooperation CoCoCoCo Compliant

11. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017 11
Ratings – technical compliance
25-Apr-17
9
21
10
0
Compliant
Largely compliant
Partially compliant
Non compliant

12. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017
Key findings
 Sweden has a reasonable understanding of its ML/TF risks,
but this is not consistent across authorities. Sweden does
not have a national coordination body for AML/CFT at the
policy level, which has a negative effect on Sweden’s
effectiveness in other areas, including the understanding of
risk across agencies
 Sweden’s implementation of targeted financial sanctions
(TFS) against terrorist financing is ineffective, mainly
because of serious technical deficiencies that are inherent
within the framework of applicable EU regulations, and
because of Sweden’s failure to propose or make
designations itself. Sweden is not able to transpose TFS
against proliferation financing without delay, but this is
mitigated by other factors and has not had a practical effect
on Sweden’s ability to properly comply with UNSCRs on
proliferation.
1225-Apr-17

13. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017
Key findings
25-Apr-17 13
 Sweden prioritises international cooperation and has
established highly effective mechanisms for providing it,
including specific liaison mechanisms with Nordic and Baltic
neighbours, EU cooperation instruments, and dedicated
channels for operational cooperation with law enforcement
authorities.
 Sweden systematically collects and uses financial
intelligence; however, the FIU has inadequate IT tools and
its strategic analysis function is still being established. These
deficiencies limit its ability to identify complex cases of
money laundering and to provide risk information for other
authorities and the private sector.

14. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017
Key findings
 Authorities show a high degree of commitment and
capacity to pursue ML and TF cases and to trace and
confiscate the proceeds of crime. Prior to 2014 Sweden
suffered problems with both its ML and TF offences. The
new ML offence (introduced in 2014), and the new TF
offence (introduced in 2016) have addressed these
problems and have greatly improved the potential for
investigation and prosecution of ML and TF, although
authorities still need to build experience and precedents for
applying the new offences in practice.
1425-Apr-17

15. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017
Key findings
1525-Apr-17
 Sweden has a comprehensive supervisory system. Financial
institutions and Designated Non-Financial Business and
Professions (DNFBP) generally comply with their
obligations, and have been subject to enforcement action
when they do not. However, not all supervisors have a
sufficient understanding of the risks to apply a risk-based
approach effectively, and the FSA should increase its
capacity, in order to conduct an appropriate number of
AML/CFT-focused supervisory actions given the risk and size
of Sweden’s financial sector.
 Legal ownership and control is highly transparent in
Sweden, and some beneficial ownership information is
available. However, this is not sufficient to ensure that
beneficial ownership information is available in all cases as
such information is not collected systematically and not
subject to adequate verification or sanctions.

16. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017
Priority Actions for Sweden to
strengthen its AML/CFT System
1625-Apr-17
 Sweden should urgently introduce legal powers which
will enable authorities to apply targeted financial
sanctions relating to terrorism or proliferation, as a
bridging measure; to EU internal terrorists; or on a
national basis, together with a body or mechanism
responsible for developing proposals for designation.
 Sweden should establish a national mechanism to
ensure adequate cooperation and coordination at
policy level between ministries and operational
agencies. Clear policies/instructions on division of
labour; procedures for cross-agency case handling;
and forums for sharing of risk information should be
established, particularly between the FIU and LEAs
and the supervisors.

17. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017
Priority Actions for Sweden to
strengthen its AML/CFT System
 Sweden should increase the access to and use of financial
intelligence to identify complex cases of money laundering
as well as professional money laundering, based on
improved IT systems at the FIU and by developing its
strategic analysis capacity.
 Supervisors should improve their understanding of risks in
their specific sector(s), supported by better tools and inter-
agency communication, and use this understanding to
implement a risk-based approach towards supervising the
reporting entities. Sweden should increase the capacity of
the FSA’s AML unit in order for it to undertake appropriate
AML/CFT on-site and off-site supervisory actions,
commensurate with the risk and size of Sweden’s financial
sector.
1725-Apr-17

18. Anti-money laundering and counter-terrorist financing measures in Sweden – Mutual Evaluation Report – April 2017
Priority Actions for Sweden to
strengthen its AML/CFT System
 Sweden should take forward its plans to establish a central
register of beneficial ownership (as required by the EU
Fourth Anti-Money Laundering Directive). Sweden should
also conduct a full risk assessment of the misuse of all the
legal persons for ML/TF, and develop measures to mitigate
the use of straw-men and corporate structures.
 Authorities should build experience and establish
precedents for prosecution and sentencing under the
recently revised ML and TF offences.
1825-Apr-17