Sweden

Sweden Corruption Report

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Snapshot

Sweden_249x151.jpgCorruption is not an obstacle to business in Sweden. Sweden's Penal Code criminalises most forms of corruption, and there is a strong rule of law exisiting in the country. Municipal-level procurement is identified as a corruption risk. Swedish legislation does not make a distinction between bribery and facilitation payments, meaning there is no exception for facilitation payments. Companies should be aware of the Code on Gifts, Rewards and other Benefits in Business, published as a supplement to Penal Code changes (in Swedish). The government of Sweden has implemented anti-corruption laws effectively. The OECD Working Group on bribery recognises the efforts made by Sweden to enforce its foreign bribery offence.

December 2015
GAN Integrity

Judicial System

European_Commission.svg.pngThe rule of law is well maintained in Sweden, and the judicial system operates independently and impartially, with consistent application of laws. Property rights are secure, contracts are enforced, expropriation is highly unusual and the protection of intellectual property rights is consistent with global standards (ICS 2015). The judiciary’s independence and the efficiency of Sweden's legal framework are considered competitive advantages (GCR 2015-2016). Criticism regarding integrity measures include the lack of regulations over codes of conduct and conflicts of interest (NISAS 2011, in Swedish). Sweden has ratified the New York Convention 1958 and the Convention on the Settlement of Investment Disputes (ICSID). The Arbitration Institute of the Stockholm Chamber of Commerce is one of the leading arbitration centres in the world.

Police

Citizens display a high-level of trust in Sweden's police and do not consider them to be affected by corruption. Respondents report that corruption is unlikely to be carried out by the police (European Commission, Feb. 2014). The government has established effective mechanisms to investigate and punish corruption among the police forces (HRR 2014).

Public Services

The Swedish public services sector is perceived to be free from corruption, despite isolated instances. Businesses consider government bureaucracy to constitute a competitive disadvantage for the country (GCR 2015-2016). Municipalities and counties are reportedly vulnerable to corruption, with the majority of corruption instances involving the building and construction industry, the management of facilities and infrastructure, and the social care sector (EUACR 2014). Getting electricity in Sweden is less time-consuming and less costly on average compared to other OECD countries (DB 2016).

Land Administration

The Swedish land administration does not pose significant corruption risks for businesses. Nearly one-third of all alleged active bribery and one-fifth of all passive bribery offences have taken place within the construction and civil engineering sector (RCiS 2013). Almost half of surveyed citizens believe that bribery and abuse of power are widespread among officials issuing building permits (ES, Feb. 2014). Swedish law adequately protects property rights. Private property is expropriated only for public purposes in a non-discriminatory manner, with reasonable compensation and in accordance with established principles of international law (ICS 2015). Sweden has fully implemented an online system for property registration, which is significantly less time consuming on average compared to other OECD countries (DB 2016). 

Tax Administration

Corruption presents a very low risk for businesses when dealing with Sweden's tax authorities. The Swedish Tax Agency's (Skatteverket) staff have undergone anti-corruption training (OECD, Aug. 2014).

Customs Administration

The customs administration carries a very low corruption risk for companies trading across borders in Sweden. Companies assess the efficiency and transparency of the border administration as high (GETR 2014). Irregular payments in relation to imports and exports rarely occur (GETR 2014), and trading across borders is less costly and less time-consuming than the regional average (DB 2016). 

Public Procurement

Businesses may contend with corruption risks when dealing with public procurement in Sweden. In one report, companies believe that favouritism is generally not perceived to affect the decisions of procurement officials (GCR 2015-2016), while another report states more than one-third of surveyed Swedish managers believe that corruption and favouritism hampers competition (EUACR 2014). Municipal-level procurement suffers from conflicts of interest and weak auditing procedures, and is identified as a potential corruption risk. Municipalities reportedly lack effective control mechanisms to prevent cronyism and nepotism in connection with public procurement (EUACR 2014). This is particularly apparent in the processes of privatisation of public assets (Linde & Erlingsson 2012). Swedish businesses consider public procurement managed by local authorities more prone to corruption compared to those managed by national authorities (European Commission, Feb. 2014). Almost half of citizens believe that bribery and abuse of power are widespread among procurement officials (European Commission, Feb. 2014).

One of the biggest corruption cases in Sweden involves the part government-owned telecommunication company TeliaSonera, which faced investigations for allegedly paying USD 320 million in bribes in return for lucrative contracts in Uzbekistan. The bribes were paid for many years to an unknown company registered in Gibraltar, which was identified to be owned by Gulnara Karimova, the daughter of Uzbekistan’s president. Three former TeliaSonera executives and four Uzbeks including Karimova are named suspects. Investigations are ongoing (Financial Times, Sep. 2015; OCCRP, May 2015). TeliaSonera later again faced allegations of corruption involving its dealings in Kazakhstan, as the company’s partners were found to be closely linked to the presidential family. An international law firm, Norton Rose Fulbright, investigated the case and concluded that TeliaSonera was guilty of unethical, if not criminal, practices in Uzbekistan, Azerbaijan, Kazakhstan, Nepal and Tajikistan; TeliaSonera is planning a withdrawal from all central Asian countries (OCCRP, May 2015).

Legislation

The Swedish Penal Code criminalises most forms of public and private corruption. The Code addresses corruption offences on embezzlement, breach of trust and bribery (in Swedish); offences are arranged into five sections: passive bribery, active bribery, gross bribery, trading in influence and negligent financing. The legislation prohibits anyone who is employed or performs a function to give or receive a bribe. The trading in influence provision criminalises the receipt of an undue advantage for the purpose of influencing a third person in connection with the exercise of public authority or a public procurement process. The Income Tax Law (in Swedish) specifically prohibits the tax deduction of bribes and other unofficial expenses. A code on gifts, rewards and other benefits in business acts as a supplement to the Penal Code and has been developed under the auspices of the Swedish Anti-Corruption Institute (Institutet Mot Mutor). Public procurement is governed by Sweden's Public Procurement Act (in Swedish). The law does not distinguish between bribery and facilitation payments, and the country rejected a facilitation payments exception to the OECD Convention. The Working Group on Bribery recognises that Sweden has made significant progress on enforcing its offence of bribing a foreign public official, but claims they should improve its framework for the liability of corporations and other entities for foreign bribery (OECD, Aug. 2014). The prosecution of foreign bribery is limited by factors including the dual criminality requirement and the corporate liability requirement. The offence of negligent financing of bribery addresses the offence of foreign bribery abroad, yet fails to address when it is committed by intermediaries not representing a Swedish company directly, such as a foreign subsidiary (EUACR 2014). The maximum fines imposed on Swedish companies committing foreign bribery are not proportionate and thus not effective (EUACR 2014).

As a member of the European Union, Sweden adheres to multilateral conventions on industrial, intellectual and commercial property, and has streamlined its legislation to comply with EU rules on competition. Sweden is party to theUN Convention against Corruption, the Criminal Law Convention on Corruption and the Civil Law Convention on Corruption.

Civil Society

In the Freedom of the Press index, Sweden ranks among the best countries in the world. Its media environment is considered 'free' (FotP 2015). Swedish law protects freedom of speech, and its media is independent. Sources are protected by law and are able to access information through one of the most robust freedom of information statutes. An informant can choose to remain anonymous in order to avoid reprisals, and employers are legally prohibited from investigating the source. The media plays an important role in holding politicians and the public administration accountable through strong legal protections, including the Freedom of the Press Act (NISA 2011). The Supreme Court ruled that the editors of Swedish newspapers are personally accountable for all articles published on the newspaper’s website (including those filed in archives), making the editors legally responsible for articles approved by their predecessors. The ruling was criticised by Sweden's press (FotP 2015).

Freedoms of assembly and of association are respected in Sweden (FitW 2015). Workers have the right to strike, to form and join independent unions, and to bargain collectively (HRR 2014).

Sources

Topics: Europe & Central Asia