Swedish Financial Supervisory Authority Proposes Amendments to the Swedish Anti-Money Laundering Regulations

The Swedish Financial Supervisory Authority (the “SFSA”) proposes amendments to the SFSA regulations (FFFS 2017:11) on measures against money laundering and the financing of terrorism ("AML Regulations"). The proposed changes are expected to come into effect on March 26, 2024.

The current AML Regulations require companies that are obliged entities and that are subject to the Swedish Anti-Money Laundering and Counter Terrorism Financing Act (2017:630) (the "AML Act") to appoint a so-called AML/CTF Officer (Swedish: “centralt funktionsansvarig”) (“AML Officer”). In the proposal, the SFSA suggests that it should not be mandatory to appoint an AML Officer under certain conditions. Instead, an AML Officer should only be appointed when justified based on the scale and complexity of the obliged entity’s operations.

The current AML Regulations states that an AML Officer should be placed within the obliged entity and perform tasks in accordance with the AML Regulations. In the new proposal, the SFSA suggests that the execution of certain tasks of the AML Officer may be delegated to a third-party. However, the proposed change does not mean that it will be permitted to place the role of an AML Officer within a third party, meaning that in cases where an obliged entity must appoint an AML Officer, the position must still be within the obliged entity.

Furthermore, the SFSA proposes that an obliged entity that does not appoint an AML Officer, must establish a control function for regulatory compliance, which, in such a case, shall become responsible for ensuring that the obliged entity implements and enforces its obligations under the AML Act and AML regulations.

Finally, the SFSA proposes to extend the list of tasks that the AML Officer shall perform to include mandatory reporting to the obliged entity’s board of directors and management with regards to the obliged entity's efforts against money laundering and terrorism financing. Such reporting shall be performed at least annually.

The proposal may still be subject to changes following to the feedback received from the market participants. Responses to the consultation are to be submitted no later than January 24, 2024.

Assuming the proposed changes are finally adopted in their current or adjusted form, the following actions may be relevant for affected companies to be compliant:

1. Make an internal assessment of whether it is necessary to appoint an AML Officer given the amended rules. Special consideration in the assessment should be given to turnover, the number of employees, and the products and services you provide, in the same manner as in the assessment of whether a member of management body responsible for AML/CTF should be appointed or an independent audit function should be established (see Chapter 6, Section 1, first paragraph of the AML Regulations). Make sure to document the assessment and the parameters that formed the basis of it.
   
   
2. If your assessment results in that no AML Officer is appointed, make sure to establish a control function for regulatory compliance, or, if such a function has already been established, ensure that its tasks cover the AML compliance, including reporting to the Police Authority with regards to the AML/CTF area. See also item 4 below regarding updating relevant internal documentation.
   
   
3. Evaluate whether it may be appropriate to engage a third party to perform certain tasks otherwise assigned to the AML Officer (see Chapter 6, Section 6, second paragraph of the AML Regulations, as amended).
   
   
4. Ensure that relevant internal governance documents are updated in accordance with the decisions made in relation to the AML-officer, its tasks and other changes that may be relevant following the amended AML regulations.
   
   
5. Establish a routine for internal reporting on the company's compliance with the AML rules to the management.

How can we assist?

Bird & Bird regularly provides advice to clients in relation to AML/CTF regulations. Please contact us if you need guidance or further advice on the AML/CTF regulation and the proposed amendments.