When applicable, The Swedish Financial Intelligence Unit (Sw: Finanspolisen, of the Swedish Police Authority).

In principle conduct according to article 1.3 Directive (EU) 2015/849.

The generic term Money Laundering is used to describe the process where criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source.

Any conduct that is an offence according to Swedish law or a conduct that is an offence according to foreign law that corresponds with an offence by Swedish law, and if the purpose of the offence is such as stated in article 1.3 of the directive.

According to Section 3 in the Swedish Act (2014:307) on Penalties for Money Laundering offences, a person is guilty of a money laundering offence if he or she, provided that the measure is intended to conceal the fact that money or property derives from an offence or criminal activities or to promote the possibility of someone appropriating the property or its value,

1. transfers, acquires, converts, stores or takes another such measure with the property, or
2. supplies, acquires or draws up a document that can provide a seeming explanation for the possession of the property, participates in transactions that are carried out for the sake of appearances, acts as a front or takes another such measure.

According to Section 4 in the Swedish Act (2014:307) on Penalties for Money Laundering offences, a person is also guilty of a money laundering offence if he or she, without the measure having a purpose such as is indicated in Section 3, improperly promotes the possibility of someone converting money or other property deriving from an offence or criminal activities.

Money laundering is defined in Chapter 1 Section 6 in the Swedish Act (2017:630) on Measures to Prevent Money Laundering and Terrorism financing (below referred to as the Anti-Money Laundering Act, “AMLA”).

Advocates and associate lawyers are regulated, supervised and monitored by the Swedish Bar Association and to no extent at all by the State or any other authority. With that being said, there is a proposal for new legislation in which advocates and associate lawyers may be fined by a County Administrative Board (Sw: Länsstyrelsen).

The Swedish Financial Supervisory Authority (SFSA, Sw: Finansinspektionen), is one of the more important regulators. This is a public authority, whose official role is to promote stability and efficiency in the financial system as well as ensure effective protection for consumers. The SFSA authorises, supervises and monitors all companies operating in Swedish financial markets. The SFSA is accountable to the Ministry of Finance.

Apart from the responsibility of the Finance Police Department, a person or company working in certain areas of business is obligated to report to the register against money laundering at the Swedish Companies Registration Office. The person or company is also under supervision of the County Administration Office that may take measures against businesses that aren’t in the register.

Yes. The Fourth Money Laundering Directive was implemented in Sweden mainly through the new Act (2017:630) on Measures against Money Laundering and Terrorist Financing, which came into force on 1 August 2017. However, some aspects are still in the process of being implemented, especially issues regarding supervision and sanctions for law firms and members of the Swedish Bar Association. This additional legislation was planned to enter into force January 1st 2019, but so far it has not yet been presented to the Swedish Parliament.

Act 2017:630 on Measures to Prevent Money Laundering and Terrorism financing

Act 2014:307 on Penalties for Money Laundering Offences

Code of Professional Conduct for Members of the Swedish Bar Association

If established in Sweden, advocates must be registered at the Swedish Bar Association. Visiting foreign advocates must adhere to the same anti-money laundering regulations as are applicable to Swedish advocates.

Lawyers from other EU Member States may provide legal services in Sweden following the rules on freedom of movement of lawyers. Lawyers who are not advocates are also subject to AMLA.

If yes, to what extent? To the same extent as Swedish lawyers.

The anti-money laundering laws are applicable within the Swedish jurisdiction. The supervision of the Swedish Bar Association is limited to registered members. Any person who is licensed as the counterpart of a Bar member in another state within the European Union and who practises in Sweden on a permanent basis under the title used in their home country must be registered with (and therefore under supervision of) the Swedish Bar Association.

If yes, to what extent?

See above.

According to Chapter 1 Section 2 item 20 AMLA advocates and item Chapter 1 Section 2 item 21 AMLA lawyers.

The Swedish Bar Association has a adopted a guidance for members of the Swedish Bar; compilation of applicable law and guidance.

Yes, through the disciplinary committee and the Bar Associations programme of proactive supervision. The Swedish Bar Association is not responsible for administrative pecuniary sanctions stated in the directive.

The Swedish Bar Association is the competent authority to ensure general compliance of advocates. Also see 4. above.

Depending on a law firm´s size and nature of the business, three different types of senior management may be appointed to ensure compliance with the AMLA: one person responsible within senior management such as the Board of Directors, one person responsible for internal auditing and one person as a Money Laundering Reporting Officer. Since most Swedish law firms are rather small in size, most firms only appoint one person, the Anti-Money Laundering Reporting Officer.

The provisions on reporting to the financial police are not applicable on members of the bar when ascertain the legal position of their client, or performs the task of defending or representing that client in, or concerning, judicial proceedings, including providing advice on instituting or avoiding such proceedings. However when applicable, the Swedish Bar Association recommends that a firm shall have someone in charge of money laundering compliance and someone to review the internal control of the compliance. Depending on the size of the firm, it may be one or several partners but the general rule is that each and every one of the lawyers shall be compliant in their own cases/client.

A lawyer is under an obligation to ensure that clients establish their identity when a business relationship is entered into.

If a customer is a physical person, the identification documents (passport, driving licence, etc.) must include name, address and personal registration number or other similar identification if the person has no personal identification number.

If the customer is a company the identification documents must include name, address and company registration number. Reasonable arrangements must be made to understand a company’s control structure and the ultimate beneficial owners must be identified as well as to whether the ultimate beneficial owner is a PEP.

A lawyer/law-firm can, under certain conditions, use and rely on CDD-information obtained by another lawyer/law-firm and certain other entities governed by AMLA. However, the law firm is still responsible for making sure that the information is sufficient according to Chapter 3 Section 21 AMLA.

When accepting a mandate the lawyer should take following into consideration:

1. Is the act 2017:630 on measures against money laundering and terrorist financing applicable on the mandate (Ch. 1 § 4)?

- No? No CDD is needed however, it is recommended due to unforeseen future circumstances/mandate.

2. If yes, is the client a company on the public market within EEA? If yes, there is in general no need to examine any beneficial owner.

- Yes? If classed as low risk, go to step 4 “low risk”. If there is circumstances for any other assessment than low risk, go to step 4 and asses if “normal risk” or “high risk”.

- No? Go to step 3.

3. Does the client have a beneficial owner and is that a politically exposed person and/or is the client based in a high-risk third country?

- If Yes, client is “high risk” and enhanced examination is required.

- If No, go to step 4.

4. Assess the risks of money laundering and/or financing terrorism with the firms knowledge of the client.

- If “low risk”, conduct simplified CDD (Ch. 3 § 15).

- If “normal”, conduct normal CDD (Ch. 3 § 14).

- If “high risk”, conduct enhanced CDD (Ch. 3 §§ 16, 17, 19).

Yes, Sweden follows a risk-based approach to money laundering and terrorist financing (see above).

If yes is there a set framework in place or guidelines to assist with this?

The Swedish Bar Association has issued guidance for its members.

Yes, see above at Q13 p 2. Chapter 2 Section 4 AMLA provides types of clients for which the ordinary identity verification requirements may not be required.

If yes, please supply further details

Examples of situations where exceptions can be made from the requirement of basic due diligence (simplified due diligence) are when the client is a:

• Swedish authority
• Listed company situated within the EEA
• Listed company outside the EEA if anti-money laundering regulations and supervision are effectively in place

Yes, see Q13 p 3 (client have a beneficial owner and is that a politically exposed person and/or is the client based in a high-risk third country, or of course, other circumstances give reasons to an enhanced assessment).

If yes please provide details of these requirements and examples of the types of evidence required to demonstrate an enhanced level of CDD.

See annex III to the Directive,

• Customer risk factors:
• the business relationship is conducted in unusual circumstances;
• customers that are resident in geographical areas of higher risk as set out in point (3);
• legal persons or arrangements that are personal asset-holding vehicles;
• companies that have nominee shareholders or shares in bearer form;
• businesses that are cash-intensive;
• the ownership structure of the company appears unusual or excessively complex given the nature of the company's business;
• Product, service, transaction or delivery channel risk factors:
• private banking;
• products or transactions that might favour anonymity;
• non-face-to-face business relationships or transactions, without certain safeguards, such as electronic signatures;
• payment received from unknown or unassociated third parties;
• new products and new business practices, including new delivery mechanism, and the use of new or developing technologies for both new and pre-existing products;
• Geographical risk factors:
• without prejudice to Article 9, countries identified by credible sources, such as mutual evaluations, detailed assessment reports or published follow-up reports, as not having effective AML/CFT systems;
• countries identified by credible sources as having significant levels of corruption or other criminal activity;
• countries subject to sanctions, embargos or similar measures issued by, for example, the Union or the United Nations;
• countries providing funding or support for terrorist activities, or that have designated terrorist organisations operating within their country.

Enhanced due diligence is required whenever money laundering or terrorist financing seems more likely than usual. According to Chapter 2 Section 5 AMLA, Swedish law points inter alia to situations where:

• the customer has not been physically present for identification purposes (“distance clients”);
• information on the identity of the client is insufficient, inadequate or deemed not reliable;
• any obscurity remains after ordinary due diligence;
• financial products or transactions which can facilitate money laundering or financing of terrorism are employed;
• there are cross-border banking relationships with institutions outside the EEA;
• the transaction or business relationship involves a politically exposed person (PEP).

No

No

Yes

If yes, please describe.

If reliable source, e.g. another law firm, bank, insurance broker, auditor/accountant within the EEA.

A lawyer/ law-firm can, under certain conditions, rely on information regarding a client obtained by another lawyer/ law-firm or by certain other entities governed by AMLA. Among those are financial institutions licensed to do business within the European Union, within a country with which the European Community has entered into an agreement for expanding the financial area, or within a country not falling within the first two categories but imposes money laundering and terrorist financing laws similar to the Fourth EU Directive.

However, according to Chapter 3 Section 21 AMLA the lawyer/ law firm is still responsible for making sure that the information is sufficient.

Since Sweden in principle has a constitutional obligation to comply with the EU Directive and the Directive is in part a result of the FATF-agreement/recommendations.

According to Chapter 4 Section 3 AMLA, a lawyer has a duty to scrutinize transactions in order to detect suspicious transactions which may have connection to money laundering or financing of terrorism. If suspicion remains after a closer analysis/investigation of the transaction has been carried out, the lawyer has an obligation to report all information of potential money laundering or financing of terrorism without any further delay.

Furthermore, according to Chapter 4 Section 6 AMLA, a lawyer is under an obligation, even without having any suspicion and upon request from the Swedish Finance Police, to report any information without delay which can be useful for an investigation on money laundering or financing of terrorism.

If the lawyer has reasonable ground to suspect that the lawyers mandate is used for money laundering and/or terrorist financing or that the property could be connected to/derived from criminal activity.

Yes, the provisions on reporting to the financial police are not applicable on members of the bar when ascertain the legal position of their client, or performs the task of defending or representing that client in, or concerning, judicial proceedings, including providing advice on instituting or avoiding such proceedings.

If yes, please describe.

A lawyer is exempted from reporting information that he receives from or obtains about one of his clients if it is in connection with:

• determining the legal position for the client;
• defending or representing the client in, or;
• concerning judicial proceedings, including advice on instituting or avoiding proceedings.

This applies regardless whether the information is received before, during or after such judicial proceedings or in connection with the relevant clients’ legal position. This is stated in Chapter 4 Sections 8 AMLA.

Furthermore, Chapter 36 Section 5 of the Swedish Code of Judicial Procedure sets limits on an advocate’s obligation to act as witness in a court of law and also regulates situations where there is a prohibition to ask questions to an advocate. An advocate can, according to this rule, be forced to give up privilege information only when the suspicion concerns potential criminal acts which would be subject to a prison sentence of 2 years or more.

According to the Swedish Bar Association, this rule is of immediate importance to an advocate when assessing the boundaries for reporting obligations under the AMLA.

For guidance how to deal with these kinds of situations from a client privilege and confidentiality perspective, please consult the Guidelines of the Swedish Bar Association.

If the report is in accordance with the obligations of the AMLA, an advocate will not risk charges of breaching client confidence from reports subject to the AMLA. If the report is made without any cause and can be seen as manifestly unfounded, the advocates could possibly face disciplinary sanctions.

If a lawyer detects that he or she is in violation of the law, there is no obligation to assist in self-incrimination. However, if reporting a suspicious transaction, the subjective prerequisites for constituting an offence should in general not be fulfilled.

There is an obligation to abstain from the transaction/ legal advice according to Chapter 3 Section 3 AMLA. Under certain circumstances, i.e. when abstaining from the transaction/ legal advice could obstruct the investigation or alert the client, proceeding with the transaction/ legal advice is permitted.

The lawyer is in principle obligated to refrain from the transaction, but may in some cases be obligated to proceed and report if the suspicion/preliminary investigation otherwise would be compromised.

If yes, must consent from authorities be obtained first?

No, it is sufficient that it is probable that refraining from the transaction would compromise the investigation.

If yes, please provide advice as to how to do this

N/A

Yes. The duty of CCD and report is constant throughout the mandate.

If yes, please describe

According to Chapter 2 Section 3 and Chapter 3 Section 13 AMLA the CDD should be kept up to date until the business relationship has ended.

Reference from a trustworthy bank, i.a. a bank statement, a company’s annual report or tax returns.

Same as above.

According to Chapter 3 Section 7 AMLA, the firm should request the clients full name and documents to verify the identity of the client (such as passport, national ID, driving license).

According to Chapter 3 Section 7 AMLA, the firm should request the company’s name, address and registration number in order to identify the client and the entity type, e.g. certificate of registration, article of association or shareholder agreements.

To all above, there are no formal requirements but the CCD should be executed with care and the firm can use available databases, as national registration, information available at Swedish Companies Registration Office or similar authorities where the client is registered.

The lawyers are affected with greater transaction costs due to administration and there may be apparent conflicts of interest in violation of the core values of lawyer’s ethical rules regarding client confidentiality and discretion. Especially considering that a lawyer is obliged to represent and act in the client’s best interests within the established framework of the law and good professional conduct. Furthermore, a lawyer must practise with integrity and so as to promote a society governed by the rule of law and must act impartially and correctly and so as to uphold confidence in the members of the lawyer’s profession.

There has been a case some twenty years ago where a lawyer was convicted for a less severe form of money laundering. The lawyer was disbarred. Approximately 20-25 reports by lawyers on suspicion of money laundering to the FIU.

Yes, report of April 2017.

If yes, what were the findings concerning Lawyers' compliance with the FATF 40+9 recommendations?

Sweden has a reasonable understanding of its risk, although this is not consistent across authorities. Furthermore, Sweden does not have ha national coordination body for AML/ CFT at the policy level which has a negative effect in other areas, such as understanding the risk across agencies.

Information regarding legal ownership and control is available since it is highly transparent in Sweden. However, since the information is not systematically collected and not subject to adequate verification or sanction, the transparency in Sweden is not sufficient.

The authorities show a high degree of commitment and capacity to pursue offences and since 2014 Sweden have greatly improved the potential for investigation and prosecution of offences relating to ML and TF.

For more information about the findings, see the link below
http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/MER-Sweden-2017.pdf

Yes, 2013 and 2014 with some follow up by individual authorities during 2015.

If yes, please provide a link to the published report:

https://fi.se/globalassets/media/dokument/rapporter/2013/nationell_penningtv.pdf

Within the proactive supervision of the Swedish Bar Association, none of the member firms asked has been obligated to issue a report to the Finance Police Authority. Between 2009 and 2012, there was approx. 20-25 reports from lawyers.

N/A