Trends and climate
Trends
Have there been any recent changes in the enforcement of anti-corruption regulations?
Awareness of corruption risks and the need to prevent corruption have increased significantly in recent years. Legislation was last amended in 2012 in order to modernise the rules, make them more efficient and widen the scope of application in accordance with international standards such as the Council of Europe’s Criminal Law Convention on Corruption and the UN Convention against Corruption. This led to the introduction of two new offences into Swedish law – namely, ‘negligent financing of bribery’ and ‘trading in influence’.
The Swedish Code of Business Conduct governing gifts, rewards and other benefits in the business sector was first introduced in 2012 and is administered by the Anti-Corruption Institute. The code is currently being reviewed and as a first step and institute is now asking for input regarding how the code is perceived and possible areas to amend or clarify.
On 1 January 2017 the first Swedish Whistleblowing Act (2016/749) came into force. The act does not oblige companies to have any whistleblowing system but strengthens the protection for private-sector employees.
A question that has created some debate is how information about possibly corrupt activities may be processed as part of private corporate investigations after the entry into force of the EU General Data Protection Regulation (GDPR). Pursuant to Article 10 of the GDPR, the processing of personal data relating to criminal convictions and offences will be carried out only under the control of official authority or when the processing is authorised by EU or member state law providing for appropriate safeguards for the rights and freedoms of data subjects. Pursuant to the new Data Protection Act and the corresponding regulation that supplements the GDPR, the Swedish government and the Swedish Data Protection Agency may issue rules enabling private companies to process data relating to criminal convictions and offences. So far, the only rules issued in this respect are the Data Protection Agency’s regulation DIFS 2018:3 (issued on 3 May 2018), which provides only limited exemptions from the prohibition in Article 10 of the GDPR.
Pursuant to DIFS 2018:2 , private companies may process data concerning criminal offences only to the extent that the data concerns individuals in key position or leading positions with the company or corporate group, and that there are legitimate reasons to process the data in particular channels (ie, whistleblowing structures) for the purpose of investigating whether the individual has been involved in serious wrongdoings concerning bookkeeping, internal bookkeeping controls, auditing, prevention of bribery, criminality within banking of finance business, or other serious wrongdoings which concern the vital interests of the organisation or life or health of individuals. These restrictions may create difficult conflicts between a company’s interest in investigating indications of possible wrongdoings and the GDPR, which provides high penalties for violations.
In September 2018 the district court hearing began in the high-profile criminal case against the former chief executive officer (CEO) and two other top executives of the telecoms company Telia – it is expected to continue throughout Autumn 2018. The allegations concern corruption and bribery in Uzbekistan. On 21 September 2017 it was announced that Telia and its subsidiary Coscom LLC have admitted to making illegal payments of Skr2.6 billion to various Uzbek government officials to win business contracts in the country and Telia has agreed to pay $965 million (approximately Skr8 billion) in fines in a settlement with US and Dutch authorities. The executives now being prosecuted deny liability.
In September 2018 the Swedish Prosecution Agency also pressed charges for, among other things, gross bribery against certain directors of the Allra-group (formerly Svensk Fondservice), including the CEO. Among other things, the prosecutor claims that the CEO and another board member of Allra have set up a scheme whereby pension funds managed by Allra bought financial instruments at an inflated price and the Skr170 million profit (approximately €17 million) made by the seller of the instruments was split between the seller and the Allra representatives. The Allra directors deny liability. The prosecutor continues to investigate allegations against additional parties, which may result in additional charges.
Legislative activity
Are there plans for any changes to the law in this area?
The rules regarding corporate fines are currently being reviewed; the maximum amount can be expected to be raised. In November 2016 the Inquiry on Certain Issues Concerning Corporate Fines presented its report with proposals for legislative changes. The purpose of the review was to ensure that the criminal law regulatory framework for legal persons is efficient, effective and modern, and that it reflects Sweden’s commitments under EU and international law, vis-à-vis the Organisation for Economic Cooperation and Development (OECD), for example. The inquiry’s report has not yet resulted in any governance bill. Corporate fines may be imposed on legal entities for crimes committed in the exercise of their business activities, such as bribery and other corruptive offences. Under the current rules, corporate fines can amount to between Skr5,000 (approximately €500) and Skr10 million (approximately €1 million). This is a very low maximum amount compared to fines imposed in other countries, which the OECD (among others) has criticised. The inquiry has proposed to raise the maximum amount to Skr100 million.
Legal framework
Authorities
Which authorities are responsible for investigating bribery and corruption in your jurisdiction?
The Swedish Prosecution Authority established the National Anti-corruption Unit in 2003 to investigate crimes of corruption, as well as cases that are closely related to this type of crimes.
In addition to its investigative activities, the National Anti-corruption Unit works with judicial matters concerning corruption and developing international cooperation. Historically, the Swedish authorities have not prioritised investigating and prosecuting corruption by Swedish companies acting abroad, but as shown by the Telia case discussed in the section “Trends and climate”, this is changing. The National Anti-corruption Unit also works to raise awareness and increase knowledge within the authorities and companies in order to identify and investigate corruption more efficiently.
Domestic law
What are the key legislative and regulatory provisions relating to bribery and corruption in your jurisdiction?
The anti-bribery provisions are set out in Chapter 10 of the Swedish Penal Code. These provisions are applicable both to the public and the private sector. Furthermore, bribery committed abroad is punishable in Sweden if it was committed by either a Swedish citizen or a foreign citizen domiciled in Sweden. However, the offence must be punishable under both Swedish law and the law of the country where the crime was committed.
The Swedish Anti-corruption Institute adopted the Code of Business Conduct, prepared in collaboration with representatives from the business sector, on 1 September 2012. The code, which was amended on 20 November 2014, is part of the self-regulation of the business sector. The provisions of the Swedish Penal Code on bribery are general and can be difficult to interpret. The Code of Business Conduct complements and clarifies that legislation. Although it lacks legal status, it provides valuable guidance for companies when, for instance, writing their own anti-corruption guidelines. The Code of Business Conduct covers all businesses obliged to maintain bookkeeping, including publicly owned companies, and covers all types of benefit. The code is generally stricter than the Penal Code; accordingly, companies that comply with the Code of Business Conduct can expect their actions to be legal. The Code of Business Conduct is currently being revised.
The Ethics Committee of the Swedish Anti-corruption Institute may also render an assessment of whether or not a contemplated action is compatible with the Code of Business Conduct. The assessments are published on the institute’s website at www.institutetmotmutor.se.
Acts of corruption may, in addition to the provisions on bribery, violate other Swedish laws such as the Marketing Act (2008/486), the Competition Act (2008/579), the Income Tax Act (1999/1229) and the Public Procurement Act (2016/1145).
International conventions
What international anti-corruption conventions apply in your jurisdiction?
The following conventions apply in Sweden:
•the Convention of the Organisation for Economic Cooperation and Development on Combating Bribery of Foreign Public Officials in International Business Transactions (prop1998/99:32);
•the Council of Europe Criminal Law Convention on Corruption (ETS 173);
•the Council of Europe Civil Law Convention on Corruption (ETS 174)
•the UN Convention against Corruption;
•the UN Convention against Transnational Organised Crime;
•the Council of Europe Additional Protocol of Criminal Law Convention on Corruption;
•the Council of Europe Convention on the Protection of the European Communities’ Financial Interests;
•the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime;
•the Council of Europe Resolution (99) 5 of the Committee of Ministers of the Council of Europe: Agreement Establishing the Group of States against Corruption; and
•the Council of Europe Resolution (97) 24 of the Committee of Ministers of the Council of Europe: Twenty Guiding Principles for the Fight Against Corruption.
Specific offences and restrictions
Offences
What are the key corruption and bribery offences in your jurisdiction?
Bribery and some ancillary offences are addressed in Chapter 10 of the Penal Code.
Bribe-taking and bribe-giving Under Chapter 10, Section 5(a) of the Penal Code, an employee or person performing an assignment who receives, accepts a promise of, or demands an undue benefit for the performance of his or her duties is taking a bribe.
Under Chapter 10, Section 5(b) of the Penal Code, a person who gives, promises or offers an undue benefit for the performance of the duties of such a person is giving a bribe. It is irrelevant whether the bribe will benefit the person receiving the bribe or someone else.
A finding of bribery rests on three conditions, outlined below:
•The nature of the recipient: Any ‘employee or person performing an assignment’ can be the recipient or intended recipient of a bribe pursuant to the Penal Code, irrespective of whether the engagement is in the public or private sector. As regards the criterion of ‘assignment’, it may be based on a contract, election, appointment or duty. Thus, self-employed entrepreneurs are also covered by the anti-bribery provisions;
•The connection between the benefit and the receiver’s position: For bribery to occur, there must also be a certain connection between the recipient’s professional position and the presumptively improper reward, which could entail a risk of undue influence. The prosecutor does not need to prove a fraudulent intent or that the reward has actually influenced the recipient’s actions. It is sufficient that, based on an objective assessment, there was a risk that the reward could have affected the recipient; and
•The existence of ‘improper’ benefit: Anything of direct or indirect value to the recipient could, as a starting point, be considered a benefit, but only ‘improper’ benefits are prohibited. However, it is not always easy to draw the line between proper and improper benefit since the concept of ‘improper’ benefit is not defined in the Penal Code and there are no fixed monetary limits. Also, benefits that do not have any financial value can, depending on the circumstances, be considered improper. This could, for example, be the case with benefits like attractive memberships, honours and awards.
Lacking any clear definition, an overall assessment of all relevant circumstances must be made in each case. The Code of Business Conduct seeks to provide some guidance. It distinguishes between, on the one hand, benefits that typically influence decisions or the manner of completing work tasks, which are improper and, on the other hand, benefits that are typically beneficial to a relationship, but influence neither decisions nor actions, which are permissible.
The assessment of whether or not a benefit is improper should take the following factors into account:
•the value of the benefit;
•the recipient’s professional position;
•the connection between the benefit and the recipient’s professional duties; and
•the group of recipients and the forms of the benefit.
The value of the reward is thus an important factor. A reward of an exceptionally low value runs little to no risk of being able to influence the way the recipient performs his or her official duties and is therefore unlikely to be deemed improper.
Another important factor is the position or function of the recipient. The value of the benefit must be put in relation to the receiver’s integrity and susceptibility to influence, based on factors such as position, work tasks, age and economy. Even an insignificant gift can be at risk of being deemed improper if the recipient holds a particularly sensitive position; for example, if he or she is exercising public authority or carrying out public procurement. According to the Code of Business Conduct, no benefits may be offered to such persons.
According to the Code of Business Conduct, particular restrictiveness should also be applied in relation to:
•employees or contractors at public entities even if the person is not involved in the exercise of public authority or public procurement; and
•employees or contractors within sectors where integrity is particularly sensitive, such as in publicly owned or financed companies, privately owned banks, credit and insurance institutes, as well as companies involved in certifying or monitoring activities.
Benefits to employees of privately owned companies are, as a starting point, permissible according to the Code of Business Conduct, provided that the benefit is moderate, offered overtly and not otherwise of such a nature that it could be deemed to influence behaviour.
The ‘overtness’ requirement means that the benefit should normally be directed at the recipient’s employer or principal, be approved by it or comply with its established policies on benefits. However, approval by the employer does not apply in relation to employees or contractors in the public sector.
Examining the connection between the benefit and the recipient’s professional duties means analysing to what extent the benefit can be said to fulfil a useful professional purpose for the recipient. A lunch may, for example, serve to discuss work-related matters and a field trip may provide valuable insights that cannot be gained at the office. The expenditure must, however, be reasonable.
Trading in influence In addition to the above, according to Chapter 10, Section 5(d) of the Penal Code, the following actions are also criminal:
•to receive or accept a promise of, or demand, an undue benefit from someone; and
•to give, promise or offer an undue benefit to someone.
In each case, the undue benefit must be for the purpose that the recipient influences a person’s decision or other acts in connection with the exercise of public authority or in a public procurement – namely, trading in influence.
Negligent financing of bribes As introduced in 2012, ‘negligent financing of bribes’ is a criminal offence under Chapter 10, Section 5(e) of the Penal Code. This provision states that a business person or business entity that provides its representative or business partners with funds and, thereby, by gross negligence, promotes an infringement of the anti-bribery provisions shall be convicted of negligent financing of bribery. This targets primarily corruption via an agent, consultant of other intermediary. Consequently, a company that provides funds to a third party acting on behalf of the company must take appropriate measures to ensure that the money is not used for illicit payments.
Hospitality restrictions
Are specific restrictions in place regarding the provision of hospitality (eg, gifts, travel expenses, meals and entertainment)? If so, what are the details?
There are no specific restrictions in place. As described above, the bribery provisions of the Penal Code are based on the concept of ‘improper reward’, but that concept is not defined in the Penal Code and there are no specific rules regarding hospitality. As a starting point, anything of direct or indirect value to the recipient, including travels, meals, entertainment and other hospitality could, depending on the circumstances, be considered an improper reward.
In the private sector, the Code of Business Conduct states that a benefit is typically permitted if it is moderate and provided overtly. Invitations to attend events, for example, should generally be directed at the recipient’s employer or principal, be approved by it or comply with its established policies on benefits. In principle, a benefit containing access to an event should be aimed at an undefined group of people, rather than at specifically chosen individuals.
In relation to the public sector, the fact that a reward is given in the open or with the knowledge of the receiver’s principal does not exclude liability.
Companies should be very careful when considering inviting representatives of the public sector to events – the Prosecution Authority has been known to bring corruption charges in such cases. Although the courts have not always found that crimes had been committed, this shows that these matters are sensitive and may be difficult to assess.
In a recent judgment, the Svea Court of Appeal overturned a verdict by the Stockholm District Court and ruled that bribery had taken place in a case where certain organisations in the music industry had invited, among other guests, politicians and representatives of authorities to their annual Christmas and Spring parties. In support of its conclusion, the Court of Appeal noted in particular that:
•the authorities invited were allocating funds to be regarded as an exercise of public authority;
•the defendants’ positions of office with the authorities required a high degree of integrity, implying that there was very little scope for them to accept any benefits; and
•the value of attending the parties exceeded normal representation and could not be considered a natural part of the invitation recipients’ jobs.
Even though the court established that there were no indications that the benefits had actually led to funds being incorrectly allocated, it considered the benefits to be improper and that bribery had taken place. The charged persons were ordered to pay fines and the organisations were ordered to pay corporate fines (Case B 377-18, Svea Court of Appeal judgment, 5 October 2018). Two of the five judges dissented and agreed with the Stockholm District Court that the benefits were not improper and hence no bribery had taken place. The Svea Court of Appeal judgment can be appealed to the Supreme Court.
Facilitation payments
What are the rules relating to facilitation payments?
Swedish legislation makes no distinction between bribery and facilitation payments, meaning there is no exception for facilitation payments.
Liability
Scope of liability
Can both individuals and companies be held liable under anti-corruption rules in your jurisdiction?
According to Swedish criminal law, a legal person cannot be subject to criminal charges. Under certain circumstances it can, however, be subject to corporate fines. According to Chapter 36, Section 7 of the Penal Code, a company can be subject to a fine if an act of giving a bribe or taking a bribe has been committed by a person who has a leading position in the company in terms of powers to represent the company or make decisions on its behalf, or who has a particular duty with respect to the control or monitoring of the business, or if the company otherwise has failed to do what can be expected of it to avoid the occurrence of the act of bribe-giving or bribe-taking. Corporate fines may amount to no less than Skr5,000 and no more than Skr10 million, but a review of these amounts is ongoing. The fines may be reduced if, for example, the company has reported the crime voluntarily or taken action to prevent the crime or reduce the harmful effects of it.
Furthermore, Chapter 36 of the Penal Code contains general provisions regulating forfeiture of property used as an auxiliary means in the commission of crime. The proceeds of a crime, such as illicit payments, may be declared forfeited unless this would be manifestly unreasonable. A violation of anti-corruption provisions may also lead to debarment from public procurement in line with Chapter 10 of the Public Procurement Act.
Can agents or facilitating parties be held liable for bribery offences and if so, under what circumstances?
Any natural person who provides, promises or offers an improper benefit pursuant to the Penal Code can be held liable for bribery offences. Where bribes are paid by agents or facilitating parties, representatives of the company contracting those agents or facilitating parties may be held liable for negligent financing of bribery if their acts or omissions are found grossly negligent.
Foreign companies
Can foreign companies be prosecuted for corruption in your jurisdiction?
As stated above, corporations or other legal entities may not be held criminally liable pursuant to Swedish law, although a company may be subject to a fine under certain circumstances, as described above. A crime committed in Sweden is always subject to the jurisdiction of the Swedish courts. Crimes committed outside Sweden also fall under the jurisdiction of the Swedish courts if the crimes are committed by a Swedish citizen or by a foreign citizen domiciled in Sweden, provided that the act is also a criminal offence in the jurisdiction where it was committed.
Whistleblowing and self-reporting
Whistleblowing
Are whistleblowers protected in your jurisdiction?
The first Swedish Whistleblowing Act came into force on 1 January 2017. The law does not oblige companies to have whistleblowing systems. It is instead aimed at protecting private-sector employees from employer reprisals when disclosing information about serious wrongdoings (ie, acts which may be punished by imprisonment). In order to be protected pursuant to the Whistleblowing Act, the employee must first have raised the concern internally without adequate response, or have been in a situation where it was for other reasons motivated to go public. Further, the protection does not apply where the whistleblower commits a crime by disclosing the information. The enhanced protection of whistleblowers in the act consists of a statutory liability to damages for an employer that exposes an employee to reprisals as a consequence of the employee raising the alarm.
As for public-sector employees, the Freedom of the Press Act (1949/105), which is part of the Swedish Constitution, establishes a fundamental right to communicate secret information to journalists, the media or news agencies with the purpose of publication. Since January 2017, this right also applies to employees of private companies running school, care and welfare institutions that are to some extent tax funded. If the employee chooses to criticise the company anonymously, the employer has no right to try to find out who was behind the information – there can be no investigation of who made use of their statutory right to communicate under the ‘protection for informants’ regime. Nor has the employer any right to hinder or punish the person who has spoken out. The employer has also no right to reprimand in any way anyone who publicises wrongdoings. Further, if the whistleblower claims that he or she has been retaliated against, the burden of proof to show that this did not occur will fall on the employer.
The media outlet receiving the information is obliged to protect the identity of informants. Public authorities or agencies are legally prevented from trying to find out who the informant was or to punish him or her in any way. However, the anonymity of informants and their freedom of responsibility do not apply if the person providing the information:
•commits severe crimes against national security or the state;
•intentionally discloses classified official documents for publication; or
•breaches duties of confidentiality specifically mentioned in Chapter 16 of the Public Access to Information and Secrecy Act (2009/400).
A complex system of exemptions is formulated to protect some values that legislature considers more important than the right to information.
Processing data about possible criminal offences may conflict with Article 10 of the EU General Data Protection Regulation, which prohibits private entities from processing such data unless permitted pursuant to national law. In Sweden, the Data Protection Agency, which has been authorised by the government to issue relevant national rules, has taken a very restrictive stance in this regard. Pursuant to the Data Inspection Agency’s Regulation DIFS 2018:2, processing data concerning possible criminal offences in a whistleblower system requires that this is necessary for investigating whether someone in a leading position or key employees may have been involved in serious misdeeds concerning bookkeeping, internal bookkeeping controls, auditing, bribery, criminality within banking of finance business, or other serious wrongdoings which concern the vital interests of the organisation or the life or health of individuals.
Self-reporting
Is it common for leniency to be shown to organisations that self-report and/or cooperate with authorities? If so, what process must be followed?
No, there is no leniency mechanism provided for by Swedish law. In general, leniency is not part of the Swedish legal system, competition law being the main exception. However, when the court decides on the level of corporate fines for crimes of corruption, the fines may be set lower if the concerned company has acted to prevent the damaging effects of the crime or reported the crime voluntarily.
Dispute resolution and risk management
Pre-court settlements
Is it possible for anti-corruption cases to be settled before trial by means of plea bargaining or settlement agreements?
In contrast to a number of other jurisdictions, Swedish law does not provide for plea or settlement agreements.
Defences
Are any types of payment procedure exempt from liability under the corruption regulations in your jurisdiction?
No payment procedures are exempt from liability under the corruption regulations in Sweden.
What other defences are available and who can qualify?
Swedish anti-bribery law does not provide for any particular defences or exceptions.
Risk management
What compliance procedures and policies can a company put in place to assist in the creation of safe harbours?
There is a growing consensus among Swedish companies on the necessity for adequate compliance measures with the aim of preventing and detecting corrupt practices. Corporate compliance programmes are now commonplace among large companies. The Swedish legislator has not published any specific guidance as to what constitutes adequate preventive measures or an effective anti-corruption compliance programme. However, the Code of Business Conduct briefly describes measures to prevent bribery and improper influences, and gives some guidance on the contents of a policy to prevent corrupt practices (Section 11 of the Code of Business Conduct). The Code of Business Conduct, however, does not provide any guidance on effective compliance measures in the broader sense. Compliance programmes are generally of growing importance, both to national and international corporations and organisations.
Record keeping and reporting
Record keeping and accounting
What legislation governs the requirements for record keeping and accounting in your jurisdiction?
There are a number of Swedish laws regulating requirements in relation to accurate corporate books and records, effective internal company controls, periodic financial statements and external auditing.
The following list is not exhaustive:
•the Companies Act (2005/551);
•the Swedish Act on Partnerships and Non-registered Partnerships (1980/1102);
•the Accounting Act (1999/1078);
•the Auditing Act (1999/1079);
•the Accountants Act (2001/883);
•the Annual Reports Act (1995/1554);
•the Income Tax Act (1999/1229); and
•the Money Laundering and Terrorist Financing (Prevention) Act (2017/630).
In addition, companies listed on a Swedish stock exchange are subject to listing contracts, which provide for fines, or at worst a combination of fine and delisting, in case of breach of contract.
What are the requirements for record keeping?
The company's transactions must all be accounted for in accordance with the Swedish Accounting Act. Bookkeeping comprises supporting vouchers, a day book and general ledger, profit and loss accounts, and balance sheets; it is always closed with an annual account or an annual report. Hence, accounting pursuant to the Accounting Act involves saving receipts, invoices and other documents, registering and reporting them in a chronological (time-based) and systematic (account-based) manner. This applies regardless of the type of company and scope of the business. Accounting records must be archived for at least seven years. Some documents should be saved even longer, such as documents containing information about acquisition of properties.
Reporting
What are the requirements for companies regarding disclosure of potential violations of anti-corruption regulations?
There is no general obligation to report crimes under Swedish law and there are also no provisions prescribing a reporting obligation with regard to bribery or other crimes of corruption.
With respect to publicly listed companies, a duty to disclose could be at hand, given that the information is of a nature that could affect the market price of the companies’ shares.
In addition, the Act on Measures against Money Laundering and Terrorist Financing (2017/630) includes certain reporting duties where there is reason to suspect money laundering, terrorist financing or that assets are the result of criminal acts.
Penalties
Individuals
What penalties are available to the courts for violations of corruption laws by individuals?
Taking a bribe and giving a bribe are both punishable with fines or imprisonment of up to two years. In case of a serious bribery crime, the sentence is imprisonment from six months up to six years. When assessing whether the crime is serious, the following factors shall in particular be taken into account:
•whether the person receiving the bribe is performing tasks that require a high degree of responsibility;
•the value of the bribe; and
•whether the bribe constitutes a part of a larger criminal scheme.
The court may order that illicit payments be confiscated by the state treasury, unless it would be manifestly unreasonable to do so. This includes not only the illicit payment itself, but also estimated economic advantages resulting from the crime. If, for example, a corporation has been able to secure an advantageous business deal by bribing its counterpart, the actual or estimated profits from that business deal may be confiscated. Bribery offences may also lead to disbarment from public procurement according to Chapter 10 of the Public Procurement Act.
Companies or organisations
What penalties are available to the courts for violations of corruption laws by companies or organisations?
Corporate fines and trading prohibitions can be imposed. If the criminal act of bribery or bribe-taking has been committed in the name of a corporation and the person acting is a high-level employee such as a vice president or a board member, or if a corporation has failed to do what could be expected of it to prevent the criminal act, the corporation may be subject to a fine in accordance with the Penal Code. The fine may range from Skr5,000 to Skr10 million, but the maximum amount will likely be raised.
