SWEDEN
Summary

Sanctions

None

FAFT AML Deficient

No

Medium Risk Areas

Weakness in Government Legislation to combat Money Laundering

 

 

ANTI-MONEY LAUNDERING

 

FATF Status

Sweden is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Compliance with FATF Recommendations

The FATF has released the Follow-Up Report to the Mutual Evaluation Report of Sweden, which was adopted in February 2006. In October 2010, the FATF recognised that Sweden had made significant progress in addressing deficiencies identified in their Mutual Evaluation Report and decided that the country should be removed from the regular follow-up process. The FATF agreed that Sweden should now report on any further improvements to its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system on a biennial basis.

In its 2006 mutual evaluation, Sweden was rated partially compliant (PC) for the core following Recommendations, Recommendation 5 (Customer due diligence) and Recommendation 13 (Reporting of suspicious transactions and compliance). As a result, it was placed in the regular follow-up process (1).

The Follow-Up Report agreed by the FATF in October 2010 and published here, finds that Sweden has taken sufficient action in remedying the identified deficiencies for the above mentioned Recommendations, that all the Core and most of the Key Recommendations overall are at a level essentially equivalent to compliant (C) or largely compliant (LC), and that substantial progress has also been made on the overall set of Recommendations which were rated NC or PC.

The decision by the FATF to remove a country from the regular follow-up process is based on updated procedures agreed in October 2008. These procedures require a country to have taken sufficient and effective action to address the compliance levels of Core Recommendations 1, 5, 10, 13, SR II and IV and overall sufficient and effective action to address the compliance levels of Key Recommendations 3, 4, 23, 26, 35, 36, 40, SR I, SR III, SR V, where those Recommendations were previously rated as partially compliant or non-compliant. “Sufficient and effective action” is defined as a level essentially equivalent to compliant (C) or largely compliant (LC).

 

US Department of State Money Laundering assessment (INCSR)

Sweden was deemed a ‘Monitored’ Jurisdiction by the US Department of State 20143 International Narcotics Control Strategy Report (INCSR).

Key Findings from the report are as follows: -

 

Sweden is not a regional financial center. Money laundering in Sweden generally occurs either through individuals who use the financial system to turn over illicit funds or with the help of corporations that use financial services. Money laundering is further facilitated by criminals having contacts or acquaintances within, or influence over, corporations and actors within the financial system. Laundered money emanates from sales of narcotics, tax fraud, economic crimes, robbery, and organized crime. Money laundering is concentrated primarily in large urban regions, such as Stockholm, and is frequently conducted over the internet, utilizing international money transfer services, gaming sites, and narcotics and illicit chemical vending sites. Suspicious transaction reports (STRs) generally do not reference organized crime, although it is a growing concern. Public corruption is not an issue in Sweden.

Sweden does not have an offshore financial center. Sweden provides no offshore banking, and does not readily attract foreign criminal proceeds as it does not have especially favorable banking regulations. There is not a significant market for smuggled goods in Sweden; however, the Swedish police consider the smuggling of bulk cash to be a problem. Sweden is a member of the EU, and money moves freely within the EU. Sweden has foreign trade zones (FTZs) with bonded warehouses in the ports of Stockholm, Göteborg, Malmö, and Jönköping. Goods may be stored for an unlimited time in these zones without customs clearance, but they may not be consumed or sold on a retail basis. Permission may be granted to use these goods as materials for industrial operations within a FTZ. The same tax and labor laws apply to FTZs as to other workplaces in Sweden.

 

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SANCTIONS

There are no international sanctions currently in force against this country.

 

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BRIBERY & CORRUPTION

 

Index

Rating (100-Good / 0-Bad)

Transparency International Corruption Index

89

World Governance Indicator – Control of Corruption

99

 

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INVESTMENT CLIMATE - Executive Summary (US State Department)

Sweden is generally considered a favorable country in which to invest. Sweden offers an extremely competitive, largely corruption-free economy with access to new products, technologies, skills, and innovations. Having only 9.6 million people, Sweden is highly dependent on exports and is one of the most pro-free trade countries in the world. Sweden is the largest market in the Baltic Sea region and is the gateway to Northern Europe and the Baltic Sea region. Low levels of corporate tax, the absence of withholding tax on dividends, and a favorable holding company regime combine to make Sweden particularly attractive for doing business.

Combined with a well-educated labor force, outstanding telecommunications network, and a stable political environment, Sweden has become more competitive as a choice for American and foreign companies establishing a presence in the Nordic region. In the World Economic Forum’s 2013-2014 report, Sweden ranked sixth out of 144 countries in overall competiveness and productivity and has been in the top six for the past ten years.

Also in 2013, Transparency International ranked Sweden as one of the most corruption-free countries in the world; third out of 177. Sweden’s economy has strong potential to benefit from intensifying, technology-driven global competition. Sweden already hosts one of the most internationally integrated economies in the world. Large flows of trade, capital, and foreign investment attest to Sweden’s global competitiveness. It is seen as a frontrunner in adopting new technologies and setting new consumer trends. U.S. exporters can take advantage of a test market full of demanding customers and high levels of technical sophistication.

Surveys conducted by investors in recent years ranking the investment climate in Sweden show little variation in their appraisals: positives mentioned are a well-trained and educated workforce; low corporate tax rates; excellent infrastructure; and easy access to capital. On the negative side are the high cost of labor, rigid labor legislation, high individual tax rates, longer processing times and overall high costs in Sweden.

 

 

 

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