Corporate crime, fraud and investigations in Sweden: overview

A Q&A guide to corporate crime, fraud and investigations in Sweden.

The Q&A gives a high level overview of matters relating to corporate fraud, bribery and corruption, insider dealing and market abuse, money laundering and terrorist financing, financial record keeping, due diligence, corporate liability, immunity and leniency, and whistleblowing.

To compare answers across multiple jurisdictions, visit the Financial  Crime Country Q&A tool.

This Q&A is part of the multi-jurisdictional guide to corporate crime, fraud and investigations law. For a full list of jurisdictional Q&As visit www.practicallaw.com/corporatecrime-mjg.

Contents

Fraud

Regulatory provisions and authorities

1. What are the main regulatory provisions and authorities responsible for investigating corporate or business fraud?

Chapters 9 and 10 of the Penal Code deals in 15 sections with different types of fraudulent behaviour and action (see Question 2).

The Swedish Economic Crime Authority or the Bribes Investigation Unit of the Swedish Prosecution Authority usually investigates corporate or business fraud. For more information see box: The regulatory authorities.

Offences

 
2. What are the specific offences relevant to corporate or business fraud?

Chapter 9 of the Penal Code deals with different types of fraudulent behaviour and action, including:

  • Fraud.

  • Gross fraud.

  • Abuse of EU subsidies.

  • Usury.

  • Swindling.

All offences are based on the principle that a person by deceit, misinformation or a similar act prompts another party (a person, group of persons, company or public authority) to act (or not to act) in a way that provides economic benefit to the person.

Chapter 10 of the Penal Code deals in ten sections with embezzlement, breach of trust, bribery and similar offences, that is, where a person in employment or based on his position can manipulate to his benefit. Sections one (embezzlement) and five (breach of trust and bribery) are probably the most relevant in the corporate context, and relate to the actions of a company's employees.

There is no strict liability under either Chapter 9 or 10. The basic requirement is that the prosecutor must prove that the action has occurred with intent, and that the person(s) charged has made a gain as a result of the action.

Special rules apply to tax offences.

 

Enforcement

3. What are the regulator's powers of investigation, enforcement and prosecution in cases of corporate or business fraud and what are the consequences of non-compliance?

An investigation can be started by the police or the inspector in charge of the pre-trial phase/investigation, normally a public prosecutor, as soon as there is reason to assume that a crime has been committed (section 23, Code of Judicial Procedure). The prosecutor is in this context comparable to the English "Examining Magistrate".

The prosecutor usually leads the investigation, assisted by the police. The investigation must consider all circumstances, including those advantageous to the suspect.

Interrogations can only be started when the prosecutor has reason to assume there is a suspect for the potential crime. The prosecutor must reasonably assume that the investigation will lead to a positive result that finds the offender, and that the evidence will lead to a verdict on the suspect(s) in court.

The police have wide powers during their investigation to:

  • Inspect private properties.

  • Seize assets.

  • Detain suspects for up to 24 hours.

However, these powers must be applied with caution, taking into account the four basic principles of legality, purpose, need and proportionality. For the above there is no need to obtain a prior court permission. However, for telephone tapping and securing digital communication from third parties (such as carriers) prior approval from the court is required.

If an offence has been carried out in another jurisdiction, a Swedish court may have jurisdiction if the offence is criminal in Sweden and it is in the Swedish public interest to prosecute.

 

Penalties

4. What are the potential penalties or liabilities for participating in corporate or business fraud?

Civil/administrative proceedings or penalties

Other than in tax related issues and bankruptcy situations, the only civil/administrative penalty is for an individual to be banned from obtaining the required licences (if any) for carrying on a business, or becoming a managing director or member of the board of a limited liability company.

Criminal proceedings or penalties

Criminal penalties for offences under Chapter 9 of the Penal Code vary depending on the type and seriousness of the crime, from:

  • Fines and up to two years' imprisonment, in normal cases.

  • From six months imprisonment up to six years imprisonment, in more serious cases.

Penalties for Chapter 10 offences range from fines up to six years' imprisonment.

In addition, a court can rule that an injured party must be compensated for its loss.

Penalties are imposed by the district court (Tingsrätt), with a possible appeal to the Court of Appeal (Hovrätt) and finally, if leave to appeal is granted, to the Supreme Court (Högsta Domstolen).

Financial crimes often also trigger tax issues. The standard of proving the case is lower in a tax court than in a criminal/civil court. Complex financial crimes subject to investigation and court proceedings may lead to acquittal, but significant tax charges and penalties may still arise for the acquitted party. There has been a debate about whether this involves double sentencing in conflict with the basic principles of the European Social Charter of the European Council. In June 2013 the Supreme Court announced its decision on this matter, ruling that this type of penalty violates the basic principles of the European Social Charter of the European Council.

Civil suits

Any damages are usually dealt with and awarded as part of the criminal case.

Class actions are possible when both the following criteria are met:

  • A large number of similar claims.

  • The individual cost would be burdensome in relation to the individual claim.

So far, class actions have been limited in number.

 

Bribery and corruption

Regulatory provisions and authorities

5. What are the main regulatory provisions and authorities responsible for investigating bribery and corruption?

The bribery provisions are found in the Penal Code, which distinguishes between passive bribery and active bribery. Swedish anti-bribery law is currently under revision. During 2012, two new bribery offences have been added to the Penal Code (see Question 7).

Acts of corruption can also violate other Swedish laws, such as the:

  • Marketing Act.

  • Competition Act.

  • Income Tax Act.

  • Public Procurement Act.

The Anti-Corruption Unit, a national prosecution office in the Swedish Prosecution Authority specialising in combating corruption, handles:

  • Criminal cases of violations against the bribery provisions.

  • Other offences closely linked to corruption.

For more information on the Anti-Corruption Unit in the Swedish Prosecution Authority, see box: The regulatory authorities. The official information is scarce see www.ekobrottsmyndigheten.se/en/our-work/ where the reference is The National Anti-Corruption Unit. The Office of the Prosecutor General has a unit known as the National Anti-Corruption Unit (Riksenheten mot korruption). The unit only handles cases of bribery and corruption and crimes connected with bribery and corruption.

 
6. What international anti-corruption conventions apply in your jurisdiction?

Sweden is a signatory to the following anti-corruption conventions:

  • UN Convention against Corruption 2003.

  • UN Convention against Transnational Organised Crime 2000.

  • OECD Convention on Combating Bribery of Foreign Public Officials 1997.

  • Council of Europe Criminal Law Convention on Corruption 1999, with reservations against Articles 12, 17, 29 and 37.

  • Council of Europe Additional Protocol to the Criminal Law Convention on Corruption 2003.

  • Council of Europe Civil Law Convention on Corruption 1999.

  • Council of Europe Convention on the Protection of the European Communities' Financial Interests 1995.

  • Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime 1990, with reservations against Articles 2(1), 21(2b) and 25(3).

  • Council of Europe Committee of Ministers Resolution (99)5 Establishing the Group of States against Corruption.

  • Council of Europe Committee of Ministers Resolution (97)24 Twenty Guiding Principles for the Fight Against Corruption.

 

Offences

7. What are the specific bribery and corruption offences in your jurisdiction?

Bribery

Bribe giving is the criminal act of giving, promising or offering or receiving, accepting a promise of or demanding an improper reward, for the performance of duties.

The connection between the giving or receiving of the improper reward and the performance of the receiver's duties is a key element of both bribe giving and bribe taking.

The relationship between the parties must be of a professional nature. This means that the recipient must be in a position where he has a practical opportunity to influence a decision or act on which the giver is dependent.

It is irrelevant whether the receiver was in fact influenced by the bribe, and the prosecutor does not have to prove fraudulent intent. Instead, the question is if the giver and receiver had a professional relationship to each another and if the improper reward was given in the context of that relationship.

Two new criminal bribery offences were added to the Penal Code as of 1 July 2012:

  • Trading in influence. This targets corruption in connection with exercising public authority and public procurement. It prohibits the promise, offering or giving of an improper reward, with intent to have the recipient influence someone else's decision or act relating to public procurement or public authority.

  • Negligent financing of bribery. This targets where an organisation (or someone with a leading position in an organisation) provides money or other assets to someone representing the organisation, and therefore by gross negligence furthers bribe giving or trading in influence.

Anything of direct or indirect value to the recipient can be considered an improper reward. The key element is the impropriety test. The interpretation of what is improper ultimately rests on the notion of morals and ethics. The word improper is not defined and an individual assessment is necessary in each case. For example:

  • Any transaction with the intent to have an effect on the way the recipient performs his duties is deemed improper.

  • If there is evidence of the recipient being influenced by the reward, or if there is proof this was intended, the reward should be deemed improper.

  • If there is no evidence of corrupt intent, the assessment is more difficult to make.

An important factor is the value of the reward and the context in which it is given. Rewards given to recipients in the public sector are generally looked on more harshly than those given in the private sector.

Foreign public officials

The same legal provisions apply to bribery of both foreign and domestic persons, including foreign public officials.

Domestic public officials

The same legal provisions apply to all types of bribery, including domestic public officials.

 

Defences

8. What defences, safe harbours or exemptions are available and who can qualify?

Swedish anti-bribery law does not provide for any defences or exceptions.

Anything of direct or indirect value can be considered an improper reward, therefore facilitation payments are not allowed.

 
9. Can associated persons (such as spouses) and agents be liable for these offences and in what circumstances?

A third party individual, such as an agent, can be liable for complicity to bribery, bribe taking and trading in influence, if intent is proved (see Question 7).

 

Enforcement

10. What are the regulator's powers of investigation, enforcement and prosecution in cases of bribery and corruption and what are the consequences of non-compliance?

During the preliminary investigation, the prosecutor can:

  • Seize property, including written documents, if it is reasonable to assume the property may be important to the investigation.

  • Issue search warrants.

Seizing property and search warrants do not require an application to court, unless they are extensive or exceptionally prejudicial to the individual. However, the court may review the seizure of property later on, if requested by the individual affected by it.

Swedish courts have jurisdiction over acts of bribery committed abroad if the act was committed by any of the following:

  • A Swedish citizen or a foreign citizen living in Sweden.

  • A foreign citizen who, after the crime was committed, became a Swedish citizen or lives in Sweden (or a Danish, Norwegian, Finnish or Icelandic citizen while in Sweden).

  • A foreign citizen in Sweden.

A condition for prosecution in any of these cases is that the act was a criminal offence in the jurisdiction where it was committed.

 

Penalties

11. What are the potential penalties for participating in bribery and corruption?

Bribe giving, bribe taking, trading in influence and negligent financing of bribery are punishable by a fine or up to two years' imprisonment.

Gross bribery and bribe taking are punishable by at least six months and up to six years' imprisonment.

If a criminal act of bribe giving or bribe taking has been committed in the name of a company, and the person committing the act is a high-level employee such as a vice president or a board member, or if a company has failed to do what can be expected from it to prevent the criminal act, the company can be subject to a civil fine ranging from SEK5,000 to SEK10 million.

 

Tax treatment

12. Are there any circumstances under which payments such as bribes, ransoms or other payments arising from blackmail or extortion are tax-deductible as a business expense?

Bribes, ransoms and similar payments are not tax-deductible.

 

Insider dealing and market abuse

Regulatory provisions and authorities

13. What are the main regulatory provisions and authorities responsible for investigating insider dealing and market abuse?

Insider dealing is regulated in Sweden by the:

  • Penal Act on Market Abuse when Trading in Financial Instruments (2005:377) (Market Abuse Act).

  • Act on Reporting Obligations for Certain Holdings of Financial Instruments (2000:1087) (Reporting Act).

The Market Abuse Act and the Reporting Act implement Directive 2003/6/EC on insider dealing and market manipulation (Market Abuse Directive).

Compliance with the Market Abuse Act and the Reporting Act is monitored by the Swedish Financial Supervisory Authority (SFSA), but the ultimate responsibility for enforcing market abuse offences rests with the Swedish Economic Crime Authority.

For more information on the SFSA, see box: The regulatory authorities.

 

Offences

14. What are the specific insider dealing and market abuse offences?

Insider dealing

Insider dealing relates to:

  • Trading on a securities market, including trading on an exchange or through an investment firm (collectively defined as trading on the securities markets).

  • Practically all kinds of instruments traded on a securities market.

  • Transactions outside the securities market (that is, private transactions without an intermediary) if, among others, the relevant financial instruments are admitted to trading on a regulated market in the European Economic Area (EEA) (or relate to such traded instruments).

Inside information is defined in accordance with the Market Abuse Directive as information about a non-publicised or publicly known circumstance, which is likely to substantially affect the price of financial instruments.

Generally, any individual who has obtained inside information, irrespective of how the information was obtained, is subject to the prohibition against insider dealing. Such an individual cannot deal in the financial instruments to which the inside information relates on the securities market (or otherwise, if the relevant financial instruments are traded on a regulated market in the EEA) on his own or on another entity's behalf, and cannot cause someone else to carry out such dealing. This prohibition also applies to shareholders in a limited company, if they obtain inside information concerning that company.

Any person who receives inside information and who on his own or on a third party's behalf, through trading on the securities market, acquires or sells financial instruments to which the information relates, can be fined or imprisoned for insider dealing (Market Abuse Act). This also applies to any person who:

  • Receives insider information and who, through advice or in any other manner, causes any third party to acquire or sell financial instruments to which the information relates through trading on the securities market.

  • Possesses inside information that consists of knowledge of that person's own criminal activities.

Market manipulation

A person can be punished for market manipulation if he, either in conjunction with trading on the securities market or otherwise, acts in a manner which he realises is likely to either:

  • Manipulate the market price or other terms and conditions of trading in financial instruments.

  • Otherwise mislead buyers or sellers of financial instruments.

This also applies where a person, in conjunction with trading on the securities market or otherwise, acts in a manner which he should have realised was intended to manipulate or mislead, as specified in the previous paragraph.

Notification requirement

In addition, the Reporting Act includes a notification requirement. The Reporting Act defines a number of individuals as having an insider position. These include:

  • The directors, deputy directors, managing director and deputy managing director of a company or its parent.

  • An auditor or deputy auditor of a company or its parent.

  • The above persons, as well as all senior officers of a subsidiary who, due to their position, may be expected to have access to non-public, price-sensitive information.

  • Senior officers and certain consultants of a company or its parent who, due to their position, may be expected to have access to non-public, price-sensitive information.

  • A partner in a partnership that is the parent of a company, but not a limited partner.

  • A shareholder holding 10% or more of the shares or voting rights in a company (whether alone or together with related natural persons or entities such as his spouse, minor children or companies in which he has a material influence).

  • A natural person whose related entities hold 10% or more of the shares or voting rights in a company.

Individuals with an insider position in a stock market company must notify the SFSA, which keeps an insider register, of:

  • Any shareholding or change to it in the company.

  • A change of shareholding in a company held by related natural persons or entities.

A stock market company is a Swedish limited company the shares of which are traded on a Swedish exchange or on a regulated market in the EEA.

The insider register is publicly available. Information from the register is on the SFSA website (www.fi.se). The main reasons for the register are to:

  • Prevent an insider from doing insider trading.

  • Be a source of information to the authorities to be used in insider investigations.

  • Provide information to the market on trading by insiders.

Reporting under the Reporting Act of a shareholding or a change in a shareholding must be made no later than five business days after the event which has caused the reporting obligation. For example, when an insider has acquired or transferred shares in the company, the acquisition or transfer must be reported within five business days of the date of the acquisition or transaction.

If the company has different classes of shares, the reporting obligation applies to all shares. Accordingly, if a company only has B-shares listed on an exchange, holdings of A-shares must also be reported, even if the A-shares are not traded on the exchange.

To enable effective supervision, the company must notify the SFSA of the individuals who are considered to have an insider position in the company or its subsidiaries. The parent must notify the SFSA of insiders in the parent company.

Further, the company must keep records of persons with access to insider information. This applies to any person in the company that has access to inside information, rather than persons defined as insiders and required to report their holdings to the SFSA. The records kept by the company are sometimes referred to as a log book, and the requirement is based on the Market Abuse Directive.

Dealing before financial reports

The Reporting Act also prohibits dealing in shares and share-related financial instruments in the 30 day period before an ordinary financial report is made public. This prohibition ends the day after publication of the relevant financial report. This prohibition applies to:

  • The directors, deputy directors and managing directors and their deputies of a company or its parent.

  • An auditor or deputy auditor of the company or its parent.

  • Natural persons or entities related to the above persons.

  • The company, in relation to trading in its own shares.

The SFSA may grant an exemption from the above prohibition in exceptional cases.

 

Defences

15. What defences, safe harbours or exemptions are available and who can qualify?

There are a number of exemptions to the insider dealing prohibition. For example, the following situations are not prohibited insider acts:

  • An investment firm either:

    • executes its client's order to sell or purchase financial instruments; or

    • without using inside information, fulfils its market maker function or its advisory or portfolio management function under an agreement.

  • A financial instrument is either:

    • acquired, and the inside information is likely to lower the price of the instrument; or

    • disposed of, and the inside information is likely to raise the price of the instrument.

  • Shares (or share-related financial instruments) are acquired on behalf of a natural person or entity, and the inside information relates to the person or entity intending to make a public offer for the shares.

  • A holder holding an option, which has an economic value at expiry, sells or exercises the option, according to its terms and conditions.

  • An issuer of an option, in connection with the exercise of the option, sells or acquires the underlying asset.

  • A future or forward is executed at expiry.

  • Financial instruments other than shares are acquired or sold without using inside information.

Further, the insider dealing and market manipulation prohibitions do not apply to trading in own shares in buy-back programmes or to stabilisation of financial instruments, provided that trading is conducted in accordance with Regulation (EC) 2273/2003 implementing Directive 2003/6/EC as regards exemptions for buy-back programmes and stabilisation of financial instruments.

 

Enforcement

16. What are the regulator's powers of investigation, enforcement and prosecution and what are the consequences of non-compliance?

When supervising compliance with the Market Abuse Act or the Reporting Act, the SFSA can generally require information to be supplied by any individual and legal entity for the purpose of the investigation.

As soon as a certain person can reasonably be suspected of an insider offence, the case is handed over to the Swedish Economic Crime Authority for further investigation.

The SFSA can, on pain of a fine, order a party to make rectification where he has failed to fulfil an obligation to comply with a request for the above information.

 

Penalties

17. What are the potential penalties for participating in insider dealing and market abuse?

Civil/administrative proceedings or penalties

A legal entity can be ordered to pay a company fine for infringing the Reporting Act. The fine is, depending on the type of infringement and the company's listed market value, between SEK15,000 and SEK1 million.

Gains from an insider dealing offence under the Market Abuse Act can be forfeited, if this is not unreasonable.

Infringing the prohibition on dealing before financial reports as well as failing to notify the SFSA of holdings and changes in holdings in a stock market company can result in a fine equal to 10% of the transaction proceeds (although, as a minimum SEK15,000 and as a maximum SEK350,000).

Criminal proceedings or penalties

Infringing the insider dealing prohibition and the market manipulation prohibition can result in fines or imprisonment for up to two years in normal cases.

If the offence is regarded as gross, the person will be imprisoned for at least six months and up to four years. If the offence is regarded as minor, the person is fined or imprisoned for up to six months.

Civil suits

Any damages are usually dealt with and awarded as part of a criminal case.

 

Money laundering, terrorist financing and financial/trade sanctions

Regulatory provisions and authorities

18. What are the main regulatory provisions and authorities responsible for investigating money laundering, terrorist financing and/or breach of financial/trade sanctions?

Money laundering

Civil/administrative law. The main legislation is the Act on Measures against Money Laundering and Terrorist Financing Act (2009:62). In addition, the SFSA publishes both binding regulations and general guidelines complementing the Act. The SFSA regulation FFFS 2009:1 (as amended by FFFS 2010:5, FFFS 2013:19, FFFS 2013:25 and FFFS 2014:9) is of particular importance.

Criminal law. The main legislation on criminal liability for money laundering is the Act on Criminal Responsibility for Money Laundering (2014:307).

Main authorities. These are the:

  • Financial Intelligence Unit (FIU) of the Swedish police force.

  • SFSA.

  • Swedish Prosecution Authority.

Other authorities. These include the following:

  • County Administrative Board. This board ensures that companies take necessary measures to prevent money laundering (and terrorist financing). This includes supervising natural and legal persons if they:

    • Engage in activities relating to accounting and auditing, except for authorised or approved accountants or registered public accounting firms.

    • Operate as a tax adviser.

    • Operate activities as an independent lawyer.

    • Engage in activities relating to sales and advice on starting a business.

    • Engage in activities relating to the sale of goods for cash equal to at least EUR15,000 per transaction.

    Branches in Sweden of foreign legal entities with headquarters abroad are also subject to this supervision.

  • Supervisory Board of Estate Agents. This state agency registers and supervises real estate agents, and provides information about good estate agency practice. It can impose disciplinary sanctions (caution or deregistration) if a real estate agent does not meet obligations under the Money Laundering and Terrorist Financing Act.

  • Swedish Gambling Authority. This agency has expertise in issues relating to gambling and lotteries. It ensures that the gambling market is legal, safe and reliable.

  • Supervisory Board of Public Accountants. This supervises, among others, qualified auditors. This consists of supervisory activities, quality control inspections, investigations and disciplinary action. For more information on the SFSA see box: The regulatory authorities.

Terrorist financing

See above, Money laundering.

Financial/trade sanctions

Main regulations. The main legislation is the Act on Certain International Sanctions (1996:95).

Main authorities. The main authorities are determined by the Swedish Government or the authority appointed by the Swedish Government on a case by case basis, but are usually the:

  • Financial Intelligence Unit (FIU) of the Swedish police force.

  • SFSA.

  • Swedish Prosecution Authority.

  • Swedish Agency for Non-Proliferation and Export Controls.

  • Swedish Customs.

  • Swedish Social Insurance Agency.

Offences

 
19. What are the specific money laundering and terrorist financing offences?

Money laundering

A person can be punished if he, with intent to conceal money or other property derived from criminal activity, transfers, acquires, sells, stores or participates in feigned transactions or enables anyone else to benefit from such money or property (section 3, Act on Criminal Responsibility for Money Laundering). In assessing whether the offence is gross, consideration is given to whether the offence was:

  • Of significant value.

  • Part of an activity carried out on a large scale.

  • Otherwise particularly dangerous.

If a person did not realise but had reasonable grounds to believe that the property was derived from criminal activity, he can instead be convicted for a minor case of money laundering. Attempts, preparation and conspiracy are criminalised under Chapter 23, section 3 of the Swedish Penal Code.

Terrorist financing

A person can be punished if he collects, provides or receives funds or other assets with the intent that they should be, or in the knowledge that they are to be, used, to commit particularly serious crime (section 3, Act on Criminal Responsibility for Financing Particularly Serious Crime).

In assessing whether the offence is gross, consideration is given to whether the offence was part of an activity carried out on a large scale, or was otherwise particularly dangerous. Punishment is not imposed in petty cases.

Attempts are criminalised under Chapter 23, section 3 of the Criminal Code.

With respect to both money laundering and terrorist financing, there is a tipping off ban. Therefore, a person or a company cannot disclose to the customer that there is an ongoing or upcoming investigation.

Financial/trade sanctions

A person can be punished if he violates a financial or trade sanction supported by the Swedish Government. A lower scale of penalties applies if the violation occurs through gross negligence, while a higher scale applies if the violation is of a serious nature. Punishment is not imposed for minor violations (section 8, Act on Certain International Sanctions). There is no liability for inciting or abetting any act referred to in Section 8 of the Act.

Defences

 
20. What defences, safe harbours or exemptions are available and who can qualify?

In general, there is no liability for attempting, preparing or conspiring to commit a crime if a person voluntarily prevents its completion, for example, by breaking off the execution of the crime (Chapter 23, section 3 of the Penal Code).

Enforcement

 
21. What are the regulator's powers of investigation, enforcement and prosecution and what are the consequences of non-compliance?

The timetable for these types of cases varies due to the diversity of the crimes involved and the length of time it takes to investigate a case.

The FIU has the authority to receive, process and analyse information about money laundering and terrorist financing. Depending on the suspected offence, the FIU can involve other Swedish authorities. The Swedish Prosecution Authority has the authority to prosecute.

The SFSA conducts operative supervision. This includes visiting companies and making sure they conduct effective and proportionate measures to prohibit money laundering and terrorist financing. Non-compliance during an investigation can result in penalties. Swedish authorities may co-operate with foreign authorities.

Penalties

 
22. What are the penalties for participating in money laundering, terrorist financing and/or for breaches of financial/trade sanctions?

Money laundering

A person who is convicted of money laundering can be imprisoned for up to two years (section 3, Act on Criminal Responsibility for Money Laundering). If the offence is regarded as gross, the person can be convicted for at least six months up to six years. With regards to petty cases, he can be sentenced to a fine or imprisonment not exceeding six months. Minor violations include when a person did not realise but had reasonable grounds to believe that the property was derived from criminal activity. Attempts, preparation and conspiracy are also penalised. In addition, the SFSA can issue reprimands or warnings, impose penalties or injunctions and revoke licences for companies that breach the applicable rules according to the Act on Measures against Money Laundering and Terrorist Financing.

Terrorist financing

A person who collects, provides or receives funds or other assets with intent that they should be used, or in the knowledge that they are to be used, to commit particularly serious crime, can be imprisoned for up to two years (section 3, Act on Criminal Responsibility for Financing Particularly Serious Crime). If the offence is regarded as gross, the person can be imprisoned for at least six months up to six years. Punishment cannot be imposed in petty cases. The punishment can differ, depending on which offence the act is attributed to. Attempts to commit the crime are also penalised.

Financial/trade sanctions

A person acting in violation of the Act on Certain International Sanctions can be sentenced to a fine or imprisonment up to two years. If the offence is regarded as gross, the person can be imprisoned for up to four years. If a person violates the act due to gross negligence, he can be sentenced to a fine or imprisonment not exceeding six months.

 

Financial record keeping

23. What are the general requirements for financial record keeping and disclosure?

There are a number of acts and regulations focusing on accounting and bookkeeping, such as the:

  • Companies Act.

  • Act on Financial Institutions.

  • Bookkeeping Act.

  • Auditing Act.

General requirements also include Swedish Generally Accepted Accounting Principles (GAAP), which specify the accepted practices and standards.

For listed companies there is also the:

  • Corporate Governance Code, which includes record keeping and disclosure provisions.

  • Contract with the applicable exchange, which includes behavioural issues, in particular concerning disclosure.

 
24. What are the penalties for failure to keep or disclose accurate financial records?

Depending on the type of failure, effect and company or person, the sanctions vary from fines to imprisonment. Examples include:

  • Failure to file the statutory accounts for a company with the Corporate Register, which renders the individual board members liable to fines.

  • The lending of corporate assets when the borrower is insolvent, where the board has been deemed responsible for the loss made by the company.

In the case of a listed company, the relevant exchange can also issue (contractual) fines.

In addition, the tax authorities may be involved, and can impose income, social security and penalty taxes.

 
25. Are the financial record keeping rules used to prosecute white-collar crimes?

The financial record keeping rules are used to prosecute white-collar crimes.

 

Due diligence

26. What are the general due diligence requirements and procedures in relation to corruption, fraud or money laundering when contracting with external parties?

Due diligence is common and recommended in Sweden. Due diligence includes most aspects of the business, taking into account what is relevant from a risk point of view. Due diligence is increasingly likely to include issues such as the risk of corruption, money laundering and other financial exposures.

Foreign companies, in particular from the US and UK, often include rules regarding compliance with the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act in their contracts with Swedish parties. This will usually include a right to audit or appoint a third party to audit certain acts by the contracting party.

 

Corporate liability

27. Under what circumstances can a corporate body itself be subject to criminal liability?

According to established legal principles in Swedish law, only physical persons can be held criminally liable. Legal entities cannot incur criminal liability. For example, if a company makes illicit payments, the physical persons who participated in the corrupt activity, such as board members or employees, are liable.

 

Cartels

28. Are cartels prohibited in your jurisdiction? How are cartel offences defined? Under what circumstances can a corporate body be subject to criminal liability for cartel offences?

This question was added in the 2015/16 edition of the guide.

 

Immunity and leniency

29. In what circumstances is it possible to obtain immunity/leniency for co-operation with the authorities?

Leniency is currently only possible in competition, money laundering and tax matters. The anti-trust leniency programme provides full leniency to a cartel party or a party to similar anti-competitive behaviour that is the first to inform.

A taxpayer that voluntarily informs the tax authority of incorrect or inaccurate information in a tax return will not be charged more than the actual tax payable and possible interest.

For details of money laundering defences, see Question 20.

 

Cross-border co-operation

30. What international agreements and legal instruments are available for local authorities?

Obtaining evidence

Sweden is a signatory to the following (which are broadly applied):

  • European Convention on Mutual Assistance in Criminal Matters 1959.

  • EC Convention on Mutual Assistance in Criminal Matters between the member states 2000.

Sweden is a member of the Schengen Agreement 1995, which includes mutual assistance rules.

There are a number of conventions on the fight against terrorism that include mutual assistance and exchange of information.

Sweden has well over 120 double tax treaties and exchange of information treaties that include access to information.

There are a number of levels of co-operation, communication and exchange of information:

  • EU-level, where the contacts are primarily between politicians but also departments/agencies.

  • European Council level, where the main contacts are at the Department of Justice level.

  • Court level.

  • Police level.

Seizing assets

The international conventions (see above, Obtaining evidence) also include assistance in:

  • Interrogating suspects.

  • Transferring legal proceedings.

  • Executing penalties.

 
31. In what circumstance will domestic criminal courts assert extra-territorial jurisdiction?

In relation to Swedish citizens and other citizens living in Sweden, crimes committed abroad may be subject to Swedish criminal jurisdiction as the case may be subject to a double criminalisation test.

 
32. Does your jurisdiction have any statutes aimed at blocking the assertion of foreign jurisdictions within your territory?

N/A

 

Whistleblowing

33. Are whistleblowers given statutory protection?

Employees in the public sector have a constitutional right to freedom of speech. An employer cannot inflict reprisals on an employee in the public sector for exercising his constitutional right. The employee can also remain anonymous in his contact with the media. The constitutional right to freedom of speech does not apply to employees in the private sector.

Statutory protection is available for all employees in certain circumstances under the Trade Secrets Act, typically if the disclosure is for the purpose of revealing criminal activity or other serious malpractice in a company.

 

Reform, trends and developments

34. Are there any impending developments or proposals for reform?

There is currently one area of reform related to global regulatory development. This consists of modifications in the corporate tax sector to restrict the deductibility of interest paid to certain countries.

 

Market practice

35. What are the main steps foreign and local companies are taking to manage their exposure to corruption/corporate crime?

Foreign companies, such as US and UK multinationals and the top-tier Swedish multinationals, have already done most of what they can to implement policies and compliance programmes. They have also taken most action necessary due to the FCPA and the UK Bribery Act.

Medium sized and small companies are far behind in understanding the risk and need of policies and programmes in case of alleged corruption. The new bribery offences (see Question 7) will force all parties to make risk assessments and introduce policies and compliance programmes.

 

The regulatory authorities

Swedish Prosecution Authority

W www.aklagare.se/In-English/

Status. An independent organisation in relation to both the courts and the police. Like all other Swedish authorities is not a department in the Ministry of Justice or any other ministry.


Online resources

Swedish Economic Crime Authority

W www.ekobrottsmyndigheten.se/en/

Status. Independent prosecuting authority. Like all other Swedish authorities is not a department in the Ministry of Justice or any other ministry.

Principal responsibilities. These include co-ordination of national measures against fraud, improper use and other irregular and inefficient handling and use of EU-related funds. It is also responsible for matters relating to economic crime. It is an important referral body with regard to legislation and it analyses and monitors trends in economic crime and proposes appropriate measures.

The Swedish Economic Crime Authority is the contact authority for the EU Commission anti-fraud office (OLAF).

National Anti-Corruption Unit of the Prosecution Authority

W www.ekobrottsmyndigheten.se/en/our-work/

Status. The National Anti-Corruption Unit is a unit within the Office of the Prosecutor General.

Principal responsibilities. The unit handles cases of bribery and corruption and crimes connected with bribery and corruption.

Swedish Financial Supervisory Authority (Finansinspektionen) (FSA)

W www.fi.se

Status. Public authority, accountable to the Ministry of Finance.

Principal responsibilities. These include promoting stability and efficiency in the financial system as well as ensuring effective consumer protection. It also authorises, supervises and monitors all companies operating in the Swedish financial markets.



Contributor profiles

Sverker Bonde

Advokatfirman Delphi

T +46 8 677 54 20
F +46 8 20 18 84
E swerker.bonde@delphi.se
W www.delphi.se

Professional qualifications. Sweden, 2008

Areas of practice. Dispute resolution and insurance.

Marcus Nivinger

Advokatfirman Delphi

T +46 8 677 54 70
F +46 8 20 18 84
E marcus.nivinger@delphi.se
W www.delphi.se

Professional qualifications. Sweden, 2008

Areas of practice. Energy, financial institutions, life sciences, and biotech, with a special focus on banking and finance, mergers and acquisitions and private equity.

Peter Nordbeck

Advokatfirman Delphi

T +46 8 677 55 30
F +46 8 20 18 84
E peter.nordbeck@delphi.se
W www.delphi.se

Professional qualifications. Sweden, 1996

Areas of practice. IT, with a special focus on trade and distribution.


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