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At the beginning of 2020, legislation to prevent terrorist financing and money laundering was tightened up. Here’s the technology that protects your company from being exploited for criminal activity.
“Most companies are respectable; these rules are aimed at those that aren’t,” says Erica Olivius, Product Manager, Business Information at Bisnode.
The EU’s Anti-Money Laundering Directive, which is law in Sweden, creates better opportunities for authorities to detect criminal activity, especially those linked to money laundering and terrorist financing. On January 1, 2020, the law was further tightened to include cryptocurrencies and prepaid cards. Furthermore, each EU country is required to create a national register of companies’ ultimate beneficial owners.
“Legislation often sets out a base level, which is tightened up afterwards following market developments. The aim of the new rules is increased transparency and a simplification of checks. After all, we have a new type of currency, cryptocurrency, which has demanded a tightening up, chiefly from a tax perspective,” says Olivius.
The Anti-Money Laundering Act is based on the EU directive devised to counter money laundering and terrorist financing. The law came into force in August 2017 and has been tightened up incrementally, most recently on January 1, 2020. The law requires companies in the financial sector in particular, such as banks, to conduct even more rigorous checks on their customers than before.
Even though it’s mainly companies in banking and finance, law firms, real estate agents – and now art dealers too – that are covered by the directive, there is one section that affects almost all types of company in Sweden: ultimate beneficial owners. The Swedish Companies Registration Office now has a register of ultimate beneficial owners.
“Virtually everyone is required to state the ultimate beneficial owner of their company, i.e. the person who owns and controls the company. In the vast majority of cases, it’s the CEO or board.”
At the same time, the requirements for starting limited companies in Sweden have been reduced, which makes it more difficult for companies to check who they are doing business with. In the worst-case scenario, there’s a risk of being exploited for criminal activity. According to Olivius: “I think it’s far more common than you think. Carrying out money-laundering checks yourself takes a tremendous amount of time. The administrative cost of properly onboarding a customer manually is sky-high because it can take several days.”
– Sweden’s leading information portal and has been collecting useful high-quality data from over 100 sources since 1977.
– Collects, compiles and analyzes data on 9.5 million people, 8.7 million companies, 7.6 million vehicles and 3.5 million properties.
– Is supplemented with 350 million foreign companies and their group connections in the integrated Dun & Bradstreet service.
– Obtains relevant information from official sources that facilitates decision-making, avoids risks, provides new business opportunities and is compliant.
– Provides access to data relating to company information, personal information, vehicle information, property information and legal information.
– Available as an app for Apple or Android.
One way of meeting the authorities’ new requirements, ensuring that the customer is legitimate while cutting the costs, is to use Bisnode InfoTorg. It brings together all the key information about 8.7 million companies (see fact box).
“At Bisnode we can offer information not only on a local and Nordic level but also on a worldwide level. We have the best quality data available,” says Olivius. “Swedish companies can do the checks required to fulfil their duty before onboarding customers. At the same time, they can cut processing times.”
Although not all industries are covered by the Anti-Money Laundering Act, Olivius thinks that businesses should investigate their partners thoroughly anyway. “With the right system, it’s quite easy to do these types of checks. It increases transparency and results in less risky business opportunities.”