Article from Ministry of Finance

Combatting money laundering and terrorist financing

Published

Combatting money laundering and terrorist financing is a priority for the Swedish government. This work takes place globally, on the EU level and nationally. In Sweden, several law enforcement and administrative agencies, together with large parts of the private sector, have obligations in this area.

Money laundering and terrorist financing are international problems that constitute a serious threat against the financial system and its institutions, and by extension also against the real economy and public security. Confidence in the financial system can be damaged quickly if its institutions are tarnished by illegal assets and money laundering or are abused for the financing of terrorists or terrorist organisations.

Combatting money laundering and terrorist financing is a question of sustainability, as expressed in Sustainable Development Goal 16.4: “By 2030 significantly reduce illicit financial and arms flows, strengthen recovery and return of stolen assets, and combat all forms of organized crime.”
More information: Sustainable Development Goals

An overview of legislation currently in force

The Swedish government works continuously with strengthening the system for combatting money laundering and terrorist financing. Since 2017, a new Act on Measures against Money Laundering and Terrorist Financing and a new Act on the Registration of Beneficial Ownership are in force, and during 2019, three legislative bills containing proposals for further reform have been submitted to the Riksdag.

A preventive system with many different actors

A number of agencies have different tasks in the system for combatting money laundering and terrorist financing. Within the framework of the preventive system, there are also stringent requirements on large parts of the private sector. Detecting attempted money laundering or terrorist financing is comparable to finding a needle in a haystack—the more who are looking, the better their tools and the better their cooperation, the easier it becomes to find the needle.

A schematic of the Swedish system for combatting money laundering and terrorist financing
This is a schematic of the Swedish system for combatting money laundering and terrorist financing, as regulated chiefly in the Act on Measures against Money Laundering and Terrorist Financing (2017:630). The entities without a dedicated supervisory authority are defined in items 15–16, 18–19 and 21–22 in the second section of the Act and are subject to supervision by the County Administrative Boards of Skåne, Stockholm and Västra Götaland. The entities with a dedicated supervisory authority are defined in items 13–14, 17 and 20 in the same section and are subject to supervision by the Estate Agents Inspectorate, the Gambling Authority, the Inspectorate of Auditors and the Bar Association. Illustration: Government Offices of Sweden

Would you like to use this picture to explain the system? You will find the picture in various resolutions for presentations or print in Swedish and English to the right.

Risk assessments and strategy for increased effectiveness

Anyone involved in the system for combatting money laundering and terrorist financing will find it useful to know what risks the Swedish and international financial systems are exposed to. The better your knowledge of your own risks, the more effective and strategic measures you can take to mitigate them. Swedish and international agencies and organisations regularly produce risk assessments for money laundering and terrorist financing.

National and supranational risk assessments

Sweden’s national risk assessment 2019 (in Swedish)
The European Commission’s supranational risk assessment 2019
The European Commission’s supranational risk assessment 2017
Sweden’s national risk assessment for terrorist financing 2014 (in Swedish)
Sweden’s national risk assessment for money laundering 2013 (in Swedish)

Additional risk assessments and reports with a particular focus

Swedish Defence University: Financial activities linked to persons from Sweden and Denmark who joined terrorist groups in Syria and Iraq during the period 2013–2016
National Council for Crime Prevention: Penningtvätt och annan penninghantering (Money laundering and other money management, in Swedish)
Swedish Defence University: Understanding Terrorist Finance, Modus Operandi and National CTF-Regimes

Sweden’s strategies

Since 2014, Sweden has a national strategy for an effective regime for combatting money laundering and terrorist financing. The strategy is based on the available knowledge on the threats, vulnerabilities and risks that Sweden is exposed to. Its purpose is to define the goals, priorities and measures necessary in the short and somewhat longer term.

A national strategy for an effective regime for combating money laundering and terrorist financing (in Swedish)

There is also a national counter-terrorism strategy which complements the counter-terrorist financing work.

Prevent, preempt and protect – the Swedish counter-terrorism strategy

The Financial Action Task Force creates the international framework

Photo of Magdalena Andersson, Minister of Finance, speaking at a meeting
Magdalena Andersson, Minister of Finance, speaks at the FATF’s Ministerial meeting in April 2019 Photo: FATF

The Financial Action Task Force (FATF) is the international organisation that since 1989 has been the core of the international efforts to combat money laundering and terrorist financing. Sweden is one of 39 members. The FATF essentially does three things:

  • First, experts from all over the world regularly meet to share experiences and create a shared understanding of risks.
  • Second, the FATF, on the basis of this common understanding of risks, issues recommendations which the countries of the world are expected to follow. The recommendations cover many areas of politics and create the conditions for effectively combatting money laundering and terrorist financing.
  • Third, the FATF assesses the compliance of the world’s countries with the recommendations as well as their practical effectiveness. The countries that are not members of the FATF are assessed by the FATF’s regional bodies. If countries are found to have serious deficiencies, they are subjected to sanctions from the FATF.

Central FATF documents

The FATF Recommendations
The FATF’s Methodology for assessing compliance with the Recommendations
The FATF’s Mandate including a Ministerial declaration from April 2019

FATF guidance

The FATF continuously publishes different types of guidance documents for the public or private sectors.

Risk-based Approach for the Banking Sector
Risk-based Approach for Legal Professionals 
Risk-based Approach for Trust and Company Service Providers
Risk-based Approach for the Accounting Profession
Risk-based Approach Guidance for the Life Insurance Sector
Risk-based Approach Guidance for the Securities Sector
Guidance for a Risk-based Approach to Virtual Assets and Virtual Asset Service Providers
Guidance for a Risk-Based Approach for Money or Value Transfer Services

Terrorist Financing Risk Assessment Guidance
Financing of the Terrorist Organisation Islamic State in Iraq and the Levant
Terrorist Financing in West and Central Africa
Financing of Recruitment for Terrorist Purposes
Risk of terrorist abuse in non-profit organisations
Best Practices on Combating the Abuse of Non-Profit Organisations (Recommendation 8)
Criminalising Terrorist Financing

Professional Money Laundering
Financial Flows from Human Trafficking
Financial flows linked to the production and trafficking of Afghan opiates
Money laundering and terrorist financing through trade in diamonds
Money laundering and terrorist financing risks and vulnerabilities associated with gold

Guidance on AML/CFT measures and financial inclusion, with a supplement on customer due diligence
Guidance on Correspondent Bank Services
Private Sector Information Sharing

Guidance on Transparency and Beneficial Ownership
Concealment of Beneficial Ownership

Anti-money Laundering and Counter-terrorist Financing for Judges and Prosecutors
Counter-Proliferation Financing

Press releases from FATF Plenaries and Ministerial meetings

June 2019: Outcomes of the FATF Plenary, 16–21 June 2019
April 2019: FATF Ministers give FATF an open-ended Mandate
February 2019: Outcomes of the FATF Plenary, 20–22 February 2019
October 2018: Outcomes of the FATF Plenary, 17–19 October 2018
June 2018: Outcomes of the FATF-MENAFATF Joint Plenary 
April 2018: International conference on combating the financing of Daesh and Al-Qaeda
February 2018: Outcomes of the FATF Plenary, 21–23 February 2018
November 2017: Outcomes of the Joint FATF/GAFILAT Plenary, Buenos Aires, 1–3 November 2017
June 2017: Outcomes of the Plenary meeting of the FATF, Valencia
February 2017: Outcomes of the Plenary meeting of the FATF, Paris 
October 2016: Outcomes of the Plenary meeting of the FATF, Paris 
June 2016: Outcomes of the Plenary meeting of the FATF, Busan Korea
February 2016: Outcomes of the Plenary meeting of the FATF, Paris
December 2015: The Financial Action Task Force leads renewed global effort to counter terrorist financing
October 2015: Outcomes of the FATF Plenary meeting, Paris
June 2015: Outcomes of the Plenary meeting of the FATF, Brisbane
February 2015: Outcomes of the Plenary meeting of the FATF, Paris

FATF assessments of member countries

Between 2012 and ca 2024, all the countries of the world will be assessed pursuant to the FATF’s methodology. This list contains the results for all FATF members.

Sweden
Press release: God nivå på Sveriges system för bekämpning av penningtvätt och finansiering av terrorism enligt FATF (Good effectiveness in Sweden’s system for combatting money laundering and terrorist financing according to the FATF, in Swedish)

Sweden’s first follow-up report

Australia (first follow-up report)
Austria (first) (second follow-up report)
Belgium (first follow-up report)
Canada
China
Denmark (first follow-up report)
Finland
Greece
Hong Kong
Iceland
Ireland
Israel
Italy (first follow-up report)
Malaysia (first follow-up report)
Mexico
Norway (first) (second follow-up report)
Portugal
Singapore
Spain (first follow-up report)
Switzerland
The UK
The US

High-risk jurisdictions and international sanctions

The FATF continuously identifies the jurisdictions of the world that feature serious deficiencies in their systems for combatting money laundering and terrorist financing. After each Plenary meeting, the FATF publishes a public statement with a listing of these countries into two groups:

  1. The so-called black list contains jurisdictions that do not cooperate with the international community and have not shown sufficient interest in combatting money laundering and terrorist financing. The members of the FATF and other countries are requested to take active countermeasures against these jurisdictions in order to protect the international financial system from continuous and serious risks.
  2. The so-called grey list contains jurisdictions that feature serious risks but that have made a commitment to improvement, which contains a thorough action plan and intensive efforts together with the FATF and the international community. The members of the FATF and other countries are requested to take into account and mitigate the risks for money laundering and terrorist financing that may arise from these jurisdictions.

In Sweden, Finansinspektionen publishes an up-to-date link to the FATF’s public statements which reporting entities are expected to take into account in their daily activities.

FATF Public Statements on Finansinspektionen’s website (in Swedish)

International sanctions from the UN Security Council and the EU

The UN Security Council, pursuant to the UN Charter, may decide on international sanctions to maintain or restore international peace and security. Therefore, there is a number of sanctions regimes in force. On the EU level, sanctions from the UN Security Council are transposed in the form of Regulations which are directly applicable in Sweden. Two relevant sanctions regimes for combatting money laundering and terrorist financing follow from resolutions 1267 (1999) and 1373 (2001).

The Ministry for Foreign Affairs has a web site with information on all current sanctions regimes.

Sanctions