More than 500 bank chiefs gathered in the Winter Garden at the Grand Hôtel in Stockholm for the Swedish Banking Association annual meeting. Half the meeting was devoted to money laundering, the other half to sustainability. The link between serious and organised crime, where there is big money, and money laundering is strong. Laundered money funds arms trafficking, drug trafficking, human trafficking, prostitution, corruption and fraud.
SEB chief Johan Torgeby, who is also chairman of the Banking Association, told the gathering that it is mainly the banks that report suspected money laundering to the finance police. But many others should be, including estate agents, casinos, lawyers, accountants and those selling capital goods. Yet last year, there were no reports at all from lawyers, tax advisors, estate agents, insurance brokers, fund brokers or mortgage loan providers. At the same time, the banks filed more than 14,000 suspected cases to the finance police.
How likely is it that no Swedish lawyer or tax adviser suspected money laundering in 2018?
The Swedish public is also silent about the matter. Perhaps it is a remnant from the time when Sweden had significantly higher taxes than today. The problem is that there can be serious crime behind money laundering.
“If you fix your nails at a nail salon for SEK 100 and it costs SEK 1,000 in the salon next door, you have to understand that this is not what it costs, these people are subject to trafficking or the whole place is a washing machine,” says Magnus Krusberg, head of Sweden at PA Consulting, which advises on countering money laundering.
The UN Office on Drugs and Crime estimates that between two and five per cent of the globe's total GDP is washed each year. This means that between SEK 7.7 trillion and SEK 19 trillion is washed. A number of years ago, Swedish experts estimated that SEK 130 billion was washed in Sweden each year. There is no fresh figure, but compared to today's GDP it is about 2.7 percent. It’s an enormous sum.
Many people who fight money laundering agree that an effective fight can curb crime. The drug dealer who can't shop with his dirty money may not want to continue in the "profession".
At the bank meeting, between the hall's stone pillars, the debaters agreed that coordination is needed to be able to block as much of the money laundering as possible. At present, 18 authorities are involved in the work on money laundering in Sweden. Thousands of people work in banks looking for suspicious transactions. But after reporting the cases to the finance police, they do not know how things go.
Last year, the Finnish Finance Police filed 19,300 suspected cases of money laundering, while the number of convictions for money laundering in the district court was 257.
“Combating money laundering is one of the most important things a company can do to take social responsibility,” says Magnus.