Swedish Authorities Warn Money Transfer Providers of Growing Money Laundering & Terrorist Financing Risks

Key Takeaways

• Elevated Risk for Money Transfer Services: Cash-heavy operations and cross-border transfers without named accounts make the sector particularly attractive for money laundering and terrorist financing.
• Tightening Regulatory Expectations: Providers must comply with Sweden’s Anti-Money Laundering Act, supervisory regulations, and EU rules on transfers of funds, with authorization now mandatory for most payment services.
• Risk-Based Compliance Is Essential: Authorities expect providers to understand and document how products, customers, agents, and geographies could be misused, and to keep those assessments current.
• Customer Due Diligence and Monitoring: Identity verification, transaction monitoring, and scrutiny of unusual behaviour—including attempts to stay below reporting thresholds—remain core obligations.
• Strict Reporting and Confidentiality Duties: Reasonable suspicion is sufficient to trigger reporting to the Financial Intelligence Unit, and providers must not tip off customers.

Deep Dive

A new guidance brochure, published on 9 January 2026, has been developed by the Swedish Coordinating Body for Anti-Money Laundering and Countering the Financing of Terrorism, working alongside the Swedish Police Authority, the Financial Intelligence Unit, the Swedish Security Service, and Sweden’s financial watchdog. Its aim is to help providers of money transfer services understand how their businesses are being exploited and what they are expected to do about it.

Money transfer services, authorities note, sit at a particularly exposed point in Sweden’s financial system. They often handle significant volumes of cash and facilitate cross-border transactions that can be completed without opening a payment account in the name of either the sender or the recipient. That combination has made the sector increasingly attractive to criminals seeking to distance illicit funds from their origins, as well as to actors involved in financing terrorism.

Cash Is Declining but Criminal Demand Isn’t

The guidance points to a structural shift that has reshaped risk across the payments landscape. As Swedish banks have steadily reduced their handling of cash, criminal actors have migrated toward alternative channels. Money transfer services now play a more prominent role in moving cash generated by drug trafficking, fraud, tax crimes, weapons trade, and international theft networks.

Authorities stress that money laundering is not limited to obviously criminal cash. Providers can face liability even when funds originate from legitimate activities if their handling of transactions reflects culpable risk-taking. Terrorist financing presents an even more complex challenge. Small, seemingly innocuous transfers, sometimes legally obtained, can be enough to support recruitment, training, or attacks.

Regulatory Expectations Are Tightening

The brochure reinforces that providers must comply with Sweden’s Anti-Money Laundering and Financing of Terrorism (Prevention) Act, the Swedish Financial Supervisory Authority’s AML regulations, and the EU framework governing information accompanying transfers of funds. It also highlights a major change that took effect in mid-2025, which is that money transfer and payment services are now subject to an authorization requirement.

Providers that previously operated under exemptions were required to apply for authorization or shut down operations by the end of 2025, with narrow exceptions. Informal payment systems, commonly referred to as hawala, are addressed head-on. Authorities underline that such services require authorization and full compliance with Swedish AML rules, noting their heightened vulnerability to money laundering, terrorist financing, and sanctions evasion.

Risk-Based Thinking, Not Routine Compliance

Rather than prescribing a one-size-fits-all checklist, the guidance leans heavily on a risk-based approach. Providers are expected to understand how their own products, customers, agents, and geographic footprint could be misused and to document that analysis in a general risk assessment that is kept current.

Customer-level risk assessments are equally central. Providers must know who their customers are, why they are using the service, and whether transactions align with what is known about their financial situation. Customer due diligence is mandatory not only for ongoing business relationships, but also for one-off or linked transactions of €1,000 or more. Where information is insufficient to manage risk, providers are expected to refuse or terminate the relationship.

Monitoring, Reporting, and Silence Toward Customers

The guidance places particular emphasis on transaction monitoring. Unusual behavior, changes in transaction patterns, or activity that lacks a clear economic purpose must be examined closely, especially for customers assessed as higher risk.

When there are reasonable grounds to suspect money laundering or terrorist financing, providers must report promptly to the Financial Intelligence Unit of the Swedish Police. In terrorism-related cases, information is quickly shared with the Swedish Security Service. Importantly, authorities stress that suspicion does not require proof. Providers are also reminded that “tipping off” customers is prohibited, even if a transaction is halted or a relationship is terminated.

Red Flags From the Front Line

A large portion of the brochure is devoted to practical warning signs drawn from real-world cases. These include attempts to break transactions into smaller amounts to avoid thresholds, customers using intermediaries or straw men, inconsistent or damaged identity documents, unexplained cash transfers to high-risk or conflict-affected regions, and unusual indifference to fees or exchange rates.

For terrorist financing, the guidance warns that even small, repeated transactions can be significant. Because recipients may remain anonymous and cash is difficult to trace, providers are often the first, and sometimes only, line of defense.

The brochure closes with a blunt reminder. If providers fail to meet their obligations, the financial watchdog can intervene, requiring corrective action, imposing sanction fees, or ordering the cessation of operations. Criminal liability is also a real risk, with penalties that can include imprisonment, asset seizure, and damages.

The tone of the guidance is firm but pragmatic. Authorities are not suggesting that every unusual transaction is criminal. But they are making it clear that vigilance, documentation, and informed judgment are now essential parts of doing business in Sweden’s money transfer sector.

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