Sweden Corruption Report

Last updated: May 2020

Snapshot

Corruption is not a significant obstacle to business in Sweden. Sweden’s Penal Code criminalizes most forms of corruption, and there is a strong rule of law 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. The government of Sweden has generally implemented anti-corruption laws effectively. However, the OECD Working Group on Bribery has been critical of Sweden’s lack of foreign bribery law enforcement.

Risk key
Low
MODERATELY LOW
MODERATE
MODERATELY HIGH
HIGH

Judicial System

The rule of law is well maintained in Sweden, and the judicial system operates independently and impartially, with consistent application of laws. Companies report strong confidence in the independence of the judiciary and are satisfied with the legal framework when it comes to settling disputes or challenging regulations (GCR 2017-2018). Bribes and irregular payments in return for favorable judicial decisions are rare (GCR 2015-2016). About seven out of ten Swedes believe the judiciary’s independence is either fairly or very good (JS 2017). About one in five judges believe some judges have been appointed on grounds other than merit or experience (ENCJ 2017). Property rights are secure, contracts are enforced, expropriation is highly unusual and the protection of intellectual property rights is consistent with global standards (ICS 2017). Judicial review of political decisions in Sweden works well along established rules (SGI 2017).

Enforcing a contract in Sweden takes less time but is significantly more expensive than elsewhere in OECD countries (DB 2018). 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 centers in the world.

Police

There is a low risk of corruption when interacting with the Swedish police. Businesses report the police is sufficiently reliable (GCR 2017-2018). Less than one in ten Swedes believe that corruption among police officers is widespread (Eurobarometer 2017). The government has established effective mechanisms to investigate and punish corruption among the police forces (HRR 2016).

Public Services

The Swedish public services sector carries a low corruption risk. Businesses report that irregular payments and bribes when interacting with government services are rare (GCR 2015-2016). A third of Swedes perceives government officials issuing business permits as corrupt, but none actually report having been asked to pay a bribe (Eurobarometer 2017). 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 (ICS 2017; EUACR 2014). There is an increasing trend of prosecutions for bribery at the lower levels of government (SGI 2017).

Starting a business takes fewer steps and time than the OECD average (DB 2018).

Land Administration

The Swedish land administration does not pose significant corruption risks for businesses. Companies report strong confidence in the government’s ability to uphold property rights (GCR 2017-2018). Nearly one-third of all alleged active bribery and one-fifth of all passive bribery offenses have taken place within the construction and civil engineering sector (RCiS 2013). Nearly half of surveyed citizens believe that bribery and abuse of power are widespread among officials issuing building permits (Eurobarometer 2017). However, no respondents actually report having been asked to pay a bribe (Eurobarometer 2017). 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 2017).

Registering property in Sweden takes only a single procedure and is much less time-consuming than in other OECD countries (DB 2018).

Tax Administration

Corruption presents a very low risk for businesses when dealing with tax authorities. Companies report that bribes and irregular payments during tax payments procedures are rare (GCR 2015-2016). However, tax rates and regulations are cited by companies as among the biggest impediments to their ability to do business in Sweden (GCR 2017-2018). The Swedish Tax Agency (Skatteverket) is among the most trusted public institutions (SGI 2017). The agency’s staff have undergone anti-corruption training (OECD 2014).

Firms have to pay tax fewer times per year and spend less time on filing taxes compared to the OECD average (DB 2018).

Customs Administration

The customs administration carries a very low corruption risk for companies trading across borders in Sweden. Businesses indicate that bribes and irregular payments during customs procedures are very rare (GETR 2016). Companies rate the time-predictability and efficiency of clearance procedures as satisfactory (GETR 2016). The cost and time required to comply with border procedures are generally far below the OECD average (DB 2018).

Public Procurement

There is a moderate risk of corruption in Sweden’s public procurement sector. Companies perceive both diversion of public funds and favoritism in decisions of government officials to be rare (GCR 2017-2018). However, another survey reported that more than one-third of surveyed Swedish managers believe that corruption and favoritism hamper competition (EUACR 2014). Bribes and irregular payments in return for public contracts are also perceived as uncommon (GCR 2015-2016). Municipal-level procurement suffers from conflicts of interest and weak auditing procedures, and is identified as a potential corruption risk (EUACR 2014). Municipalities reportedly lack effective control mechanisms to prevent cronyism and nepotism in connection with public procurement (EUACR 2014). 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 (Eurobarometer 2017).

Legislation

The Swedish Penal Code (in Swedish) criminalizes most forms of public and private corruption. The Code addresses corruption offenses on embezzlement, breach of trust and bribery; offenses 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; this means there is no distinction between private and public bribery and both are thus prohibited (BakerMcKenzie 2017). Corporations may be held liable for bribery if the company has not done what can be reasonably expected to prevent bribery, or in case the bribery was committed by an individual in a leading position or with responsibility for supervision (BakerMcKenzie 2017). The maximum penalty for an individual is SEK 150,000, proportional to the individual’s income, and if deemed a gross crime, between six months and six years of imprisonment. The law does not distinguish between bribery and facilitation payments, and the country rejected a facilitation payments exception to the OECD Convention (BakerMcKenzie 2017). The trading in influence provision criminalizes 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). A 2017 law provides whistleblowers with more protections; companies are prohibited from retaliating against whistleblowers in any way and employers have to set up internal mechanisms for whistleblowing, among other measures (Bloomberg BNA, Mar. 2017). The OECD Working Group on Bribery has issued a stern statement, declaring that Sweden has still not made significant progress on enforcing its offense of bribing a foreign public official (OECD 2017). The prosecution of foreign bribery is limited by factors including the dual criminality requirement and the corporate liability requirement (OECD 2017). The legal framework also contains loopholes; senior managers cannot currently be held accountable for directing employees to engage in bribery (OECD 2017). The maximum fine, SEK 10 million imposed on Swedish companies committing foreign bribery are not proportionate and thus not effective (OECD 2017). The government otherwise generally implements the anti-corruption framework effectively (HRR 2016).

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 the UN Convention against Corruption, the Criminal Law Convention on Corruption and the Civil Law Convention on Corruption.

Civil Society

Swedish law protects freedom of speech, and its media is independent (HRR 2016). The media landscape is diverse and the government offers subsidies to newspapers irrespective of their political affiliations (FotP 2016). Sources are protected by law and are able to access information through one of the most robust freedom of information statutes (FotP 2016). 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 (FotP 2016). 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 (FotP 2016). Freedom’s press environment is rated as ‘free’ (FotP 2017).

Freedoms of assembly and of association are respected in Sweden (HRR 2016). Workers have the right to strike, to form and join independent unions, and to bargain collectively (HRR 2016). Civil society actors in Sweden are generally able to provide high-quality policy proposals (SGI 2017).