SWEDISH FINANCIAL SUPERVISORY AUTHORITY YET TO

S E C R E T STOCKHOLM 000763

SIPDIS

E.O. 12958: DECL: 11/12/2018
TAGS: PARM PREL EFIN KNNP IR SW
SUBJECT: SWEDISH FINANCIAL SUPERVISORY AUTHORITY YET TO
PASS ON LATEST FATF GUIDANCE

REF: STATE 115523

Classified By: Acting Deputy Chief of Mission Olivia Hilton
for reasons 1.4 (b) and (d)


1. (S) Summary: The Swedish Financial Supervisory Authority
(FI) has not yet passed on the Financial Action Task Force
(FATF) warning issued on October 16 to Swedish financial
institutions and banks. The warning calls for all countries
to strengthen preventative measures to protect their
financial systems from the risks posed to the international
financial system by continuing deficiencies in Iran's
Anti-Money Laundering/Combating Terrorist Financing (AML/CFT)
regime. FI was unable to name a target date for providing
this guidance. End Summary.


2. (S) On November 6, Deputy Economic Counselor met with Mira
Naumanen, Coordinator of the Anti-Money Laundering Unit (AML)
at the Swedish Financial Supervisory Authority (FI),to
discuss how Sweden's anti-money laundering program protects
Swedish financial institutions from Iranian techniques
designed to evade Swedish controls (Reftel). Naumanen stated
that FI has sent general information to financial
institutions and banks about the UNSCR sanctions on Iran to
branch associations, has referred financial institutions to
the FATF website, and has posted guidance on its own website.
FI has warned Swedish commercial sectors with significant
business ties with Iran that transactions with Iranian
individuals or entities have an increased risk of money
laundering and terrorist financing, according to Naumanen.


3. (S) On October 16, the Financial Action Task Force (FATF)
called for all countries to strengthen preventative measures
to protect their financial systems from the risks posed to
the international financial system by continuing deficiencies
in Iran's AML/CFT regime. Naumanen admitted, however, that
FI has yet to pass on this warning to Swedish financial
institutions and banks. Naumanen also said she was unable to
provide a target date for communicating this warning, citing
FI's need to determine which framework is best suited to
accomplish this or whether a new framework is needed to
promulgate guidance. Note: This is not the first time Sweden
has been slow to pass on guidance or implement directives.
The EU is suing Sweden for failing to implement the Third EU
Money Laundering Directive by December 15, 2007. Naumanen
blamed the delay on "slow-moving bureaucracy in establishing
new domestic legislation." End Note.


4. (S) Naumanen commented that no Iranian banks, subsidiaries
or representative offices operate in Sweden, and that no
correspondent banking relationships exist between Swedish and
Iranian banks. She added, however, that if individuals or
entities in Sweden wanted to transfer money to Iran and the
recipients were not on the sanctions list, it would be
permissible to do so. When asked how FI would handle a
request from an Iranian bank to establish a subsidiary or
representative office in Sweden, Naumanen responded that FI
would need to ensure that the requesting institution was not
on any sanctions list and had obtained a clearance from the
Swedish government, adding that the entire process could take
up to six months.


5. (S) Comment: FI is clearly in no hurry to promulgate this
latest FATF warning. The fact that the EU is suing Sweden
for failing to implement the Third EU Money Laundering
Directive by December 15, 2007 also underscores Sweden's
tendency to cite the need to change domestic legislation as
an excuse to slow down the implementation of Iranian
sanctions that Sweden feels could harm Swedish exports. End
Comment.
WOOD